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7412 


Date  Due 


Aug2 
»tn2 


Compliments 

of 
The  Chemical  Foundation,  Inc. 


AMERICA 
STRIKES  BACK 


M 


AMERICA 
STRIKES  BAG 

A    RECORD    OF    CONTRASTS 


BY 
GUSTAVUS    MYERS 

Author  of 

"The  History  of  Tammany  Hall,"    "The  History  of  The  Great 

American  Fortunes,"   "The  History  of  American  Idealism," 

"The  History  of  the  Supreme  Court  of  the  United  States," 

etc.,  etc. 


NEW   YORK 

IVES    WASHBURN,    INC 
PUBLISHER 


COPYRIGHT,    1935,   BY   GUSTAVUS   MYERS 


PRINTED  IN    U.  S.  A. 


PRESS  OF 

BRAUNWORTH  Be  CO..  INC. 

BOOK    MANUFACTURERS 

BROOKLYN.  NEW  YORK 


CONTENTS 

Introductory:  The  Sway  of  Legend                    .  vii 

PART  ONE:  THE  HALLMARK  OF  MATERIALISM 

I     From  Legend  to  Fact 3 

II     "An  Essay  upon  National  Character"   .      .      .15 

PART   TWO:    MERCANTILE   DOMINATION 

III  Acanada 25 

IV  The  Lords  of  Trade 32 

V     Raging   Speculation 45 

VI    Money  Mania  in  France  and  England   .      .      .51 

VII    When  Bubbles  Burst 60 

VIII     Secret  Fraud  and  the  Revolution       ....  67 

PART  THREE:  BAITING  OF  AMERICA  BEGINS 

IX     An  Onrush  of  Critics 81 

X    In  Their  Own  Lands 102 

XI    And  Still  No  Change 118 

XII     Insular   Self-Satisfaction 138 

XIII  A  Conflict  of  Opinions 152 

XIV  Pounds  Sterling  Triumphant 170 


vi  CONTENTS 

PART   FOUR:    AN   UNABATED    CAMPAIGN 

XV     A  Change  of  Tactics 189 

XVI     "Want  of  Soul  and  Delicacy" 207 

XVII     Speaking  of  Comparisons 223 

XVIII    "The  Bitch-Goddess  Success" 240 

XIX    Rubber  Madness  and  World  Trade  .      .      .      .258 

XX    Armaments  and  Profiteering 276 

PART   FIVE:    THE   BUSINESS   OF   SCOFFING 

XXI    A  Series  of  Exhibits 297 

XXII     Uncle   Shylock 323 

XXIII  Revamping  the  Old  Theme 339 

XXIV  The  True  Contrast 358 

Notes 373 

Index  397 


INTRODUCTORY 
THE  SWAY  OF  LEGEND 

LEGENDS  have  a  mysterious  longevity.  In  the  course  of  a  few 
generations  law,  institutions,  economic  and  governmental  sys- 
tems may,  and  often  do,  greatly  change  because  the  ideas  af- 
fecting them  have  changed.  But  bare  assertion,  when  repeated 
often  enough,  becomes  established  as  seeming  truth;  and  the 
mere  scrutiny  of  it  may  then  be  looked  upon  as  presumption. 

The  range  of  legend  includes  peoples  as  well  as  individuals 
and  eras.  Through  that  medium  a  people  looms  as  something 
it  both  was  and  was  not.  Our  notion  of  "the  glory  that  was 
Greece,"  for  example,  has  a  basis  in  the  classic  beauty  of 
Greek  art,  which  contains  few  reminders  of  the  misery  of  a 
helot  population.  If  judged  by  the  extent  of  Roman  power, 
"the  grandeur  that  was  Rome"  is  not  legendary;  but  the 
definition  of  that  grandeur  is  not  allowed  to  include  the  degra- 
dation and  oppression  of  Rome's  plebeian  masses. 

Legends  drawn  from  antiquity  arose  at  a  time  when  writ- 
ten knowledge  was  scarce.  Yet  the  avalanche  of  books  and  the 
wide  reading  of  modern  times  provide  us  no  guarantee  against 
the  growth  of  new  legends.  Quite  the  contrary.  The  more 
widely  error  is  published  and  imbibed,  the  greater  its  claim 
to  unquestioned  acceptance.  Thus  there  has  been  affixed  to 
America  the  character  of  a  nation  sodden  with  materialism. 

Why  has  no  examination  been  made  into  the  nature  of  these 
assertions?  At  any  time  either  common  sense  or  knowledge 
could  have  prompted  the  taking  of  well-grounded  exceptions 
to  a  campaign  of  assertion  which  singled  out  one  country 
alone  as  the  pernicious  exponent  of  materialism.  At  any  time, 
too,  inquiry  could  have  been  made  into  the  consecutive  ar- 
raignment, both  imported  and  domestic,  of  America  as  mer- 
cenary; the  land  of  mediocrity,  deficient  in  culture;  the  coun- 
try ruled  by  a  reckless,  incompetent  democracy.  Why  have 
these  accusations  been  vested  with  such  authority  as  to  pre- 

vii 


viii  INTRODUCTORY 

elude  any  serious  effort  to  test  them  by  consulting  the  facts? 

Long  after  it  had  achieved  political  independence,  America, 
in  a  literary  sense,  remained  a  colonial  dependency.  Over  a 
long  period  American  writers  looked  reverently  to  Europe  for 
precedent,  authority  and  approval,  imitated  European  modes 
of  style  and  treatment,  and  echoed  European  judgments.  I 
am  not,  of  course,  the  first  to  point  out  this  fact:  three  genera- 
tions have  passed  since  a  noted  American  author,  in  a  mes- 
sage to  his  countrymen,  dwelt  upon  the  strange,  pervading 
deference  of  many  Americans  to  foreign  opinions  of  their 
ways  and  institutions.  In  general,  this  attitude  has  since  per- 
sisted among  a  class  of  American  writers  who  have  seen  fit 
to  stigmatize  their  own  country  as  primitive,  crude,  commer- 
cial. These  writers  have  seemed  to  possess  no  knowledge  of 
the  antecedents  of  their  attitude,  nor  any  realization  that  they 
are  but  trailing  after  an  old  fashion. 

Coincident  with  America's  emergence  as  a  nation,  foreign 
critics,  in  suspicious  unison,  declared  that  this  country 
furnished  a  singular  exhibition  of  money  mania.  The  burden 
of  their  complaint  was  that  materialism,  as  practiced  in  Amer- 
ica, was  somehow  a  native  product,  spontaneously  local  in 
its  origin  and  pursuit.  These  assertions,  however,  conformed 
exactly  to  the  custom,  then  habitual  among  European  aristoc- 
racies, of  traducing  democracy  as  low  and  mercenary  in  its 
motives.  No  inquiry  was  made,  and  none  suggested,  into  ante- 
rior conditions  in  Europe,  or  into  the  state  of  affairs  in  Amer- 
ica when,  as  colonial  possessions,  it  was  dominated  by  Euro- 
pean countries.  Of  many  things  America  may  rightfully  claim 
invention;  but  assuredly  materialism  is  not  on  the  list. 

During  all  the  years  when  Americans  allowed  themselves 
to  be  susceptible  to  this  critical  invective,  they  themselves 
were  supplying  the  best  refutation  of  it.  Theirs  was  not  the 
European  method:  concealment  of  iniquities.  As  the  continu- 
ing record  of  legislative,  aldermanic  and  Congressional  in- 
vestigations attest,  Americans  were  assiduously  exposing  their 
own  official  venality  and  business  corruption.  Nor  were  these 
disclosures  buried  in  secret  reports;  there  was  no  prohibition 
of  their  use  by  newspapers;  they  were  given  the  widest  pub- 
licity. 


INTRODUCTORY  ix 

But  that  very  merit,  which  long  remained  peculiar  to  this 
country,  was  turned  to  America's  disrepute  by  hostile  critics 
who  professed  to  see  in  it  only  a  self -admission  of  debasement. 
Those  critics  said  no  word  of  the  subtle  systems  of  corruption 
in  Europe;  nothing  of  the  systematic  suppression  of  public 
disclosures  there  prevalent  if  scandal  did  arise ;  nothing  of 
drastic  laws  forbidding  the  publication  of  proceedings  which 
rulers  or  parliamentary  bodies  wished  to  keep  secret.  Unin- 
formed about  such  practices  elsewhere,  and  faced  by  cor- 
ruption at  home,  many  Americans  assented  when  the  denun- 
ciation was  propagated  that  American  social,  political  and 
governmental  systems  were  peculiarly  ignominious  and  full  of 
innate  evils.  "They  do  these  things  better  in  Europe."  So  they 
were  told;  and  so  they  are  still  being  told. 

As  to  modern  times  the  question  is:  Have  other  nations  been 
less  materialistic  than  America?  Have  not  some,  indeed,  been 
more  so,  while  glozing  over  their  materialism  by  creating  an 
illusion  about  themselves — and  by  damning  America  as  the 
nefarious  example?  What  is  the  pretence  and  what  the  actu- 
ality? 

In  respect  of  this  our  own  historians  have  not  shown  a 
questioning  disposition  or  the  curiosity  to  explore  the  records 
of  other  countries,  and  hence  they  have  supplied  neither  en- 
lightening information  nor  needed  comparison.  Widely-read 
American  authors,  professing  to  write  American  history,  treat 
stock-watering,  stock-jobbing  and  other  speculative  practices 
as  distinctly  American  phenomena,  outgrowths  of  an  unscrupu- 
lous American  "get-rich-quick"  mania.  Such  transactions  were 
commonplaces  of  European  acquisitive  arts  when  America 
was  still  largely  a  wilderness. 

When  the  trading  nations  of  Europe  explored  and  settled 
primitive  America,  the  way  was  open  here  for  the  establish- 
ment of  European  codes  and  creeds — and  for  the  instantane- 
ous implanting  of  European  materialism.  In  that  search  for 
riches  the  transplanting  of  beliefs,  ideas  and  customs  occupied 
an  incidental  or  minor  place.  The  engrafting  of  materialism  in 
the  New  World  was  the  first,  the  preponderating  and  the  long- 
pursued  object  of  various  European  nations. 

This  book,  however,  concerns  itself  with  facts,  not  with 


x  INTRODUCTORY 

formulations  of  purpose  or  policy.  An  additional  word  of  ex- 
planation is  required.  As  will  be  seen,  I  have  had  to  give  pre- 
ponderant attention  to  British  writers  and  to  British  condi- 
tions. This  arises  from  no  desire  to  emphasize  either,  but  is 
the  consequence  of  two  compelling  facts.  Because  of  the 
identity  of  language  most  of  America's  foreign  critics  have 
been  British;  and  compared  with  the  scant  and  generally  un- 
available archives  of  other  nations,  Britain's  are  copious  and 
accessible. 

GUSTAVUS  MYERS 


PART  ONE 
THE  HALLMARK  OF  MATERIALISM 


CHAPTER   I 
FROM  LEGEND  TO  FACT 

WHEN  America  became  a  nation  every  phase  of  its  democ- 
racy was  obnoxious  to  the  nations  of  Europe.  They  at  once  set 
out  to  defame  democratic  government  by  seeking  to  discredit 
the  people  that  had  introduced  it  into  world  politics.  One  of  a 
variety  of  themes  selected  for  this  purpose  was  the  represent- 
ing of  America's  business  men  as  thoroughly  dishonest  and 
more  greedy  than  those  of  any  other  nation. 

Thrust  forward  on  every  possible  occasion  as  proof  of  Amer- 
ica's materialism,  these  accusations  came  down  through  the 
decades,  with  many  to  repeat  them  in  one  way  or  another  and 
no  one  to  controvert  them  systematically.  This  point  is  not 
brought  out  here,  of  course,  with  any  view  of  exonerating 
American  business,  which  was  infested  with  fraudulent  prac- 
tices. The  representations  of  American  business  thus  spread 
abroad  were,  in  effect,  a  falsehood  not  so  much  because  of  the 
charges  they  contained,  although  these  were  much  exaggerated, 
as  because  of  their  suppressions.  The  entire  onus  was  placed 
upon  American  turpitude;  no  mention  was  made,  for  exam- 
ple, of  British  precedent  or  responsibility. 

British  writers  loftily  assumed  that  the  character  of  British 
business  was  one  of  traditional  fair  dealing,  and  they  were 
successful  in  diffusing  this  pretence.  The  misrepresentations  of 
America  then  set  afloat  soon  became  part  of  a  great  literary 
tradition,  grew  curiously  inveterate,  and  have  continued  to 
exercise  their  world-wide  adverse  influence  down  to  the  present 
day.  But  when  British  writers  began  self-righteously  to  repro- 
bate American  commercial  practices,  what  had  long  been,  and 
still  were,  the  methods  of  business  in  their  own  country? 

This  campaign  of  British  and  other  defamers  was  greatly 
helped  by  the  growth  of  a  legend  which  assisted  in  giving  their 
declamations  a  plausible  show  of  verity.  The  long-enduring 


4  AMERICA  STRIKES  BACK 

handicraft  age  had  then  passed,  or  nearly  so,  and  the  age  of 
steam  machinery  had  come  in.  Repelled  by  the  mechanical 
processes,  the  speed  and  ugliness  of  factories,  a  succession  of 
British  writers,  without  ever  venturing  to  look  into  the  facts, 
idealized  the  conditions  of  the  handicraft  age.  Then  was  the 
time,  they  rhapsodized,  when  superior  artisans  made  superior 
products,  and  did  not  know  how  to  make  any  other  kind.  Then 
was  the  time,  they  chorused,  when  both  master  and  worker 
were  united  in  amicable  relations  and  in  solicitude  for  fine 
quality  of  work. 

This  notion  became  generally  accepted,  and  totally  hid  the 
truth.  Numbers  of  present-day  writers,  European  and  Amer- 
ican, have  followed  the  lines  thus  set  by  extolling  the  past  as 
an  age  gloriously  differentiated  from  the  unscrupulous  ma- 
terialism of  today.  Thus  in  one  of  his  books,1  as  devoid  of 
facts  as  it  is  full  of  declamation,  Guglielmo  Ferrero,  the 
Italian  historian,  views  the  past  as  the  qualitative,  and  con- 
temporary times  as  the  quantitative  age. 

Actually,  however,  the  worst  kind  of  business  materialism 
existed  in  Europe  before  America  was  ever  discovered;  and  it 
was  rife  in  Europe  centuries  after  America's  settlement.  From 
medieval  times — the  first  times  about  which  documentary  in- 
formation is  obtainable — business  was  extensively  based  upon 
fraud  in  both  manufacture  and  sale.  Displays  of  excellent  fur- 
niture and  other  goods  made  in  the  handicraft  age  are  merely 
exhibitory  and  incidental,  proving  no  more  than  that  some 
sound,  artistic  and  durable  articles  were  produced.  But  as 
testimonials  of  a  general  condition  these  specimens  are  griev- 
ously misleading.  They  do  not  attest  the  kind  of  goods  made 
for  mass  or  even  for  class  use. 

Turning  from  legend  to  fact,  inquiry  exhumes  conditions  so 
continuously  flagrant  that  in  the  long  succession  of  efforts  to 
remedy  them  law  after  law  was  passed.  There  is  no  reason  to 
believe  that*  vicious  conditions  in  England  were  not  paralleled 
in  other  European  countries.  But  in  England  the  form  of  gov- 
ernment was  adapted  to  the  perpetuation  of  records.  From  the 
thirteenth  century  the  English  Parliament  had  functioned;  its 
body  of  laws  was  kept  intact  and  in  later  times  collected  and 


FROM  LEGEND  TO  FACT  5 

published,  while  in  other  countries  decrees  and  administrative 
orders  affecting  such  affairs  were  often  lost. 

For  more  than  five  centuries  Parliament  was  steadily  occu- 
pied in  the  attempt  to  overcome  frauds  in  British  business. 
These  frauds  included  deceit  both  in  the  making  and  selling 
of  goods.  We  shall  take  up  each  industry  as  a  group. 

Recorded  legislation  dealing  with  goldsmiths  and  silver- 
smiths in  England  began  in  1300,  when  a  statute  forbade  gold- 
smiths from  making  spurious  wares  and  passing  them  off  as 
good;  sixty-three  years  later  another  such  law  was  enacted.2 
Fraud  among  goldsmiths  was  clearly  not  an  isolated  practice; 
a  law,  in  1403,  told  of  "many  fraudulent  artificers,  imagining 
to  deceive  the  common  people,  do  daily  make  locks,  rings, 
beads,  candlesticks,  harness  for  girdles,  hilts,  chalices  and 
sword  pommels,  powder  boxes  and  cups  of  copper  and  of 
latten,  and  the  same  overgilt  and  silver  like  to  gold  and  silver, 
and  the  same  sell  and  put  in  gage  to  men  not  having  full 
knowledge  thereof,  for  whole  gold  and  silver,  to  the  great  de- 
ceit, loss  and  hindrance  of  the  common  people."  This  law 
prescribed  penalties  for  deceit,  and  another  law  in  the  same 
year  ordered  the  honest  marking  of  sterling  silver,  and  penal- 
ized any  city  or  town  allowing  sale  of  any  silver  unless  sterling 
fine.3 

A  law  passed  in  1363,  and  which  remained  a  statute  until 
the  time  of  Henry  VIII,  itemized  seven  different  social  classes, 
beginning  with  knights,  esquires  and  gentlemen  and  going 
down  the  scale  to  merchants,  clerks,  handicraftsmen,  yeomen, 
servants,  plowmen  and  others  of  "mean  estate"  or  "low  de- 
gree." 4  In  the  "Statutes  at  Large"  upon  which  I  depend  the 
fact  is  clearly  brought  out  that  this  law  prescribed  the  apparel 
which  the  different  classes  should  wear  and  the  diet  to  which 
the  "lower  orders"  were  restricted;  but  there  was  no  provision 
on  the  matter  of  possessing  jewelry. 

We  now  turn  to  a  disclosure  contained  in  a  law  passed  in 
1464.  "Whereas,"  this  law  stated,  "before  this  time  in  the  oc- 
cupations of  cloth  making  the  laborers  have  been  driven  to 
take  a  great  part  of  their  wages  in  pins,  girdles  and  other  such 
unprofitable  wares  under  such  price  that  it  did  not  extend  to 
the  amount  of  their  lawful  wages"  and  thus  and  otherwise 


6  AMERICA  STRIKES  BACK 

workers  had  been  discouraged  from  keeping  at  their  tasks. 
Payment  in  money  wages  was  therefore  ordered.5  This  law 
supplies  a  competent  commentary  upon  a  system  of  double 
cheating.  The  makers  of  jewelry  turned  out  fraudulent  goods 
which,  under  pretence  of  being  true  gold  and  silver,  were 
foisted  upon  workers  in  lieu  of  wages — with  the  worker  left 
to  find  out  that  all  he  had  in  return  for  his  labor  was  spurious 
stuff. 

But  acts  respecting  the  making  of  goldware  and  silverware 
were  so  evaded  that  enactment  of  new  laws  was  constantly 
found  necessary.  The  nature  of  these  laws  shows  that  they 
did  not  deal  with  frauds  upon  the  common  people  who,  need- 
less to  say,  were  not  purchasers  of  gold  and  silver  plate.  The 
aristocracy  and  the  rich  merchants  had  efficacious  ways  of 
obtaining  action  upon  grievances;  and  while,  as  we  shall  see, 
merchants  in  every  line  of  business  were  practicing  fraud  and 
profiting  from  fraud,  they  were  quick  to  raise  an  outcry  when- 
ever they  were  defrauded. 

A  law,  in  1487,  declared  that  fraudulent  assaying  of  gold 
and  silver  had  become  "such  an  abuse"  as  to  necessitate  the 
strict  definition  of  the  rate  of  fineness  allowed  and  to  compel 
its  marking.6  The  power  of  Parliament  was  pitted  against  the 
wit  of  adroit  minds,  and  devious  wit  conquered  every  time. 
After  passing  an  act  the  lawmakers  rested  content;  but  while 
the  law  stood  stock  still,  ingenious  ways  of  getting  around  it 
were  constantly  being  contrived.  A  long  interval  ensued  when 
goldsmiths  were  secure  from  further  laws,  and  then,  in  1576, 
came  another  outburst  of  legislation  vehemently  beginning: 
"Whereas  certain  evil-disposed  goldsmiths  deceitfully  do  make 
and  sell  plate  and  other  gold  and  silver  wares,  to  the  great  de- 
frauding of  her  Majesty  and  her  good  subjects  .  .  ."  and  go- 
ing on  to  ordain  that  any  goldsmith  who  used  falsehood  or  de- 
ceit should  forfeit  the  whole  value  of  the  thing  sold.7 

Now  goldsmiths,  it  should  be  noted,  had  a  power  far  sur- 
passing that  of  any  other  branch  of  English  industry.  They 
had  become  custodians  of  funds;  the  banking  business  of  the 
mercantile  class  was  in  their  hands.  They  loaned  those  funds 
to  the  government  at  exorbitant  profit  to  themselves,  which 
practice  finally  brought  upon  them  a  summary  reprisal. 


FROM  LEGEND  TO  FACT  7 

When,  in  1672,  Charles  II  secretly  began  another  war  against 
Holland,  without  consent  of  Parliament,  he  obtained  the 
needed  cash  by  confiscating  the  funds  the  goldsmiths  had 
loaned  to  the  Exchequer.  By  this  arbitrary  proceeding  he  ruined 
many  of  the  goldsmiths  and  their  clients.  In  1694  came  the 
establishment  of  the  Bank  of  England  which  put  banking  in 
England  on  a  different  footing.  However,  others  of  the  gold- 
smiths escaped  disaster;  the  revenues  made  by  them  had  been 
so  great  that  they  still  had  large  resources,  and  these  were 
extended  by  a  settlement  made  in  the  reign  of  William  III  by 
which  the  debt  to  the  goldsmiths  was  compromised  by  a  one- 
half  payment.  From  their  various  operations  a  number  of 
the  goldsmiths  amassed  great  fortunes,  some  of  which,  in 
banking  businesses  or  in  other  ways,  have  continued  to  this 
present  time. 

In  the  eighteenth  century,  Parliament,  amid  a  plethora  of 
legislation  aimed  at  a  mass  of  other  trade  frauds,  was  still 
endeavoring  to  overcome  frauds  in  the  gold  and  silverware 
business.  Six  years  after  George  I  ascended  the  throne  it  was 
found  needful  to  reaffirm  the  foregoing  law  of  Queen  Eliza- 
beth's reign;  and  so  in  1739  another  strenuous  effort  was 
made  to  prevent  "frauds  and  abuses  in  gold  and  silver  wares." 
This  law  opened  by  declaring  straightway  that  "great  frauds 
and  abuses  are  still  daily  committed"  in  the  making  of  silver 
plate.  Reaffirming  all  laws  on  the  subject  from  the  reign  of 
Edward  I  to  that  of  George  I,  this  law  made  new  provisions.  It 
required  official  assaying  of  wares;  it  granted  heavy  costs  to 
defrauded  persons;  and  it  inflicted  fine  and  imprisonment  upon 
offenders.8 

The  sequel  came  eighteen  years  later  in  a  Parliamentary  ad- 
mission that,  despite  the  severity  of  laws  already  passed, 
"great  quantities  of  gold  and  silver  plate  of  a  base  and  in- 
ferior standard,  with  such  forged,  counterfeit  or  transposed 
marks,  stamps  or  impressions,  are  frequently  vended  in  this 
kingdom,  and  also  exported  to  foreign  lands."  The  forging, 
counterfeiting  and  transposing  of  hallmarks  had  become  a 
consummate  art;  a  highly  lucrative  business  which  sold  its 
wares  both  in  Great  Britain  and  other  countries.  In  the  effort 
to  efface  these  frauds  Parliament  did  its  sternest;  anyone  con- 


8  AMERICA  STRIKES  BACK 

victed  was  to  suffer  death  as  a  felon.9  But  later — in  1773 — a 
happy  thought  occurred  to  Parliament.  Any  sort  of  live  man 
in  the  colonies  was  better  than  a  dead  man  at  home;  so  forth- 
with there  was  issued  another  law  changing  the  sentence  from 
death  to  transportation.10 

In  feeling,  then,  British  manufacturers  were  no  doubt  ardent 
nationalists — but  in  sharing  the  practice  of  fraud  many  rose 
superior  to  native  prejudices.  As  a  case  in  point  take  this  law, 
passed  in  1698  and  entitled:  "An  act  for  the  exporting  of 
watches,  sword-hilts  and  other  manufactures  of  silver."  Let 
the  preamble  to  that  law  relate  conditions  in  its  own  words: 

"And  whereas  great  quantities  of  empty  boxes,  cases  and 
dial-plates  for  clocks  and  watches  have  been  exported  without 
their  movements,  and  in  foreign  parts  made  up  with  bad  move- 
ments, and  thereon  some  London  watchmakers'  names  en- 
graven, and  so  are  sold  abroad  for  English  work;  and  also  the 
like  ill  practices  in  England  by  divers  persons,  as  well  as  by 
some  professing  the  art  of  clock  and  watch-making,  as  others 
ignorant  therein,  in  putting  counterfeit  names,  as  also  the 
names  of  the  most-known  London  watchmakers  on  their  bad 
clocks  and  watches,  to  the  great  prejudice  of  the  buyers  and 
the  disreputation  of  the  said  art  at  home  and  abroad."  n 

The  denunciation,  however,  was  stronger  than  the  law's  en- 
forcing clause  which  forbade  export  of  all  boxes,  cases  and 
dial-plates  not  containing  the  movement,  and  decreed  for- 
feiture of  goods  for  violation.  During  this  period  and  prior 
periods,  however,  manufacturers  of  clocks  and  watches  fre- 
quently and  loudly  complained  of  the  purloining  and  disposal 
of  their  goods  by  workmen,  and  caused  the  passage  of  many 
severe  laws.  To  mention  but  one  of  these,  enacted  in  1754,  it 
need  only  be  said  that  the  fines  imposed  were  terrific;  £20  for 
the  first  offence,  £40  for  each  subsequent  offence — crushing 
sums  considering  the  paltry  wages  of  that  time.12 

(An  essay  might  appropriately  be  interpolated  here  on  the 
subject  of  what  are  called  antiques.  Traffic  in  these,  even  in 
classic  times,  has  ever  been  a  business  invested  with  senti- 
mental interest.  Things  surviving  from  olden  days — how 
quaint  they  seem  and  how  their  quality  appears  tested  and 
confirmed  by  the  verdict  of  Time!  No  suspicion  is  ever 


FROM  LEGEND  TO  FACT  9 

aroused,  provided  they  are  relics  and  not  a  modern  simulation, 
that  there  could  have  been  any  fraud  in  making  or  marking 
in  the  "good  old  days";  the  face  value  is  taken  as  real  value; 
and  our  simple  faith  in  their  genuineness  gives  cause  for  charg- 
ing fancy  prices.  But  we  cannot  linger  on  this  subject,  allur- 
ingly ironical  though  it  be.) 

If  one  particular  law  be  taken  as  proof,  as  a  recent  biogra- 
phy of  Henry  VIII  has  represented,  that  England  was  crowded 
with  foreign  artificers,  the  resulting  inference  may  be  that 
English  manufacturers  had  largely  to  depend  upon  alien  skill 
in  producing  bad  articles.  True,  a  law  of  the  reign  of  Henry 
VIII  did  complain  that  foreign  artificers  and  handicraftsmen 
were  becoming  too  numerous  and  were  "practicing  deceits  and 
falsehoods  in  their  handicrafts,  to  the  loss  and  damage  of 
natives."  This  law  further  complained  that  when  officials  tried 
to  enforce  laws  the  aliens  secretly  warned  one  another,  de- 
feating the  law's  purposes.  Furthermore,  so  it  said,  some  of 
these  interlopers  made  too  much  money  and  returned  to  their 
own  countries  to  invest  it  in  lands  and  tenements.  (Lest  there 
be  a  tendency  to  identify  unspecified  foreigners  as  Jews,  let 
the  reminder  be  made  here  that  in  1290,  under  Edward  I, 
Jews  had  been  driven  from  England,  and  that  for  more  than 
three  and  a  half  centuries  thereafter  they  were  not  allowed 
in  that  country.)  The  preamble  went  on  to  tell  how  many  other 
foreign  artificers  had  been  idle  and  had  consequently  gone  into 
crime;  moreover,  the  scarcity  of  food  at  this  time  was  at- 
tributed to  the  amount  consumed  by  swarms  of  aliens.  This 
law  set  out  to  regulate  the  movements  of  foreign  artificers.13 

All  of  which  presents  one  side  of  a  condition,  that  of  deceit- 
ful work  by  foreigners.  But  there  was  another  side  implicating 
natives  themselves.  Here  we  turn  to  a  long  complaint  made  to 
Henry  VIII  and  Parliament,  in  1533,  by  various  protesting 
master  pewterers  who  set  forth:  That  previously  many  laws 
had  been  passed  for  the  purity  of  processing  pewter  and  brass 
vessels  and  to  insure  honest  weight.  These  vessels  made  in 
England  had  been  in  good  demand  in  other  countries.  But 
"now  of  late  evil-disposed  persons,  being  the  King's  subjects 
born,  which  have  been  apprentices  and  brought  up  in  the  exer- 
cise of  said  craft  of  pewterers,  have  now  of  late,  for  their 


10  AMERICA  STRIKES  BACK 

singular  lucre,  repaired  into  strange  regions  and  countries,  and 
there  do  exercise  the  said  craft  of  pewterers,  teaching  strangers 
not  only  the  cunning  of  mixing  and  forging  all  manner  of  pew- 
ter vessels,  but  also  do  teach  all  things  belonging  to  the  said 
craft  of  pewterers."  Makers  of  pewter  vessels  in  other  coun- 
tries, the  preamble  went  on  to  declare,  were  thus  enabled  to 
send  out  great  quantities  of  platters,  pots,  basins,  flagons, 
goblets,  dishes  and  other  wares  "which  are  untruly  mixed  and 
made  of  tin,"  and  so  English  trade  was  being  ruined. 

Parliament  came  to  the  rescue  by  forbidding  a  number  of 
practices.  No  one  was  allowed  to  buy  any  wares  made  of  tin 
outside  of  England;  any  foreign  wares  could  be  seized;  no 
pewterer  was  permitted  to  teach  his  trade  in  a  foreign  land  nor 
could  he  thenceforth  take  any  alien  as  an  apprentice  or 
journeyman.14  But  the  dealers  in  fraudulent  pewter  wares 
were  so  little  suppressed  that  eight  years  later  there  was  pro- 
mulgated another  law  which  restated  penalties  and  made  "per- 
petual" the  provisions  of  the  previous  law 15 — a  piece  of 
legislation  mocked  by  a  line  of  resourceful  frauds  who  as  perpet- 
ually were  devising  new  kinds  of  illicit  strategic  methods. 

The  survey  thus  far  is  indicative  of  but  a  few  groups  of 
industries,  and  were  it  to  confine  itself  to  these  the  objection 
could  rightly  be  made  that  the  frauds  noted  were  not  symp- 
tomatic of  all  groups.  The  need  of  complete  exposure  in  this 
case  is  proportionate  to  extravagant  representations  of  the 
handicraft  period,  and  to  the  altogether  untrue  contrast  with 
modern  materialism  they  present. 

For  decades  print  has  been  saturated  with  such  unchal- 
lenged effusions  as:  "There  was  the  opportunity  then  as  there 
is  not  now  for  the  worker  to  give  a  high  degree  of  technique 
and  a  valuation  of  his  workmanship."  16  "But  industrial  meth- 
ods have  certainly  made  work  more  remote  from  instinct  and 
have  destroyed  the  joy  in  craftsmanship  which  gave  handi- 
craftsmen something  of  the  satisfaction  of  the  artist."  17  These 
are  typical  specimens  from  books;  as  for  the  swarm  of  articles 
this  characteristic  panegyric  will  suffice:  "Before  the  rise  of 
the  factory  system,  back  in  the  days  of  hand  production,  the 
average  worker  was  deeply  interested  in  the  quality  of  his 


FROM  LEGEND  TO  FACT  11 

work  and  in  the  general  management  of  his  job."  18  For  the 
additional  reason,  therefore,  of  showing  the  parentage  of  sub- 
sequent materialism,  amplification  of  medieval  and  later  prac- 
tices is  necessary. 

There  is  another  reason  too  for  this  enlarging.  In  the  nine- 
teenth, and  into  the  twentieth  century,  American  industrialism 
was  steeped  in  fraud.  Adulteration  of  foods,  medicines  and 
liquors,  shoddy  clothing,  blankets  and  other  articles  with  lying 
labels,  flimsy  shoes,  poor  furniture  veneered  to  look  good  and 
sound — these  and  a  multitude  of  other  wares  were  poured 
forth,  were  sold  under  misrepresentation  and  brought  swelling 
profits  into  the  treasuries  of  manufacturers  whether  individual, 
firm  or  corporation.  But  these  abuses,  be  it  noted,  were  only  a 
continuation  of  practices  in  colonial  times  in  America  when 
handicrafts  did  the  work.  Before  America  ever  became  inde- 
pendent of  Britain  there  were  brisk  frauds  in  exporting  bad 
flour  and  in  falsely  marking  flour  and  bread  casks;  there  were 
frauds  in  adulterating  potash  and  pearl  ash;  frauds  in  selling 
bar  iron  of  very  bad  quality,  and  in  the  sale  of  poor  leather.19 
These  frauds  were  only  a  few  transplantations  of  a  large  num- 
ber long  established  in  Europe,  of  which  England  gives  a 
plenitude  of  recorded  examples. 

Detailed  reference  to  the  long  list  of  English  statutes  aimed 
at  adulterations  and  false  weights  and  measures  would  be  a 
tedious  compilation.  In  1266  came  a  law  against  selling  short- 
weight  bread,  " corrupted"  wine  and  impure  meat  and  fish.  A 
session  in  the  pillory  ordered  by  this  law  for  infractions  de- 
terred so  slightly  that  a  little  later  a  new  law  prescribed  regula- 
tions and  penalties:  Every  baker  was  compelled  to  put  his 
own  mark  upon  his  bread,  and  if  he  overcharged  a  fine  and  the 
pillory  were  to  be  his  punishment;  any  butcher  selling  unwhole- 
some flesh  was  subject  to  fine,  the  pillory  for  the  second  viola- 
tion, imprisonment  for  the  third,  and  for  the  fourth  offence  he 
was  compelled  to  leave  the  town.20 

From  that  time  to  the  nineteenth  century  law  after  law  was 
passed  against  adulteration  and  fraudulent  weighing.  In  1430  a 
law  told  how,  by  fraud  in  weighing  of  cheese,  "the  poor  people 
of  the  realm  be  greatly  deceived."  21  In  time  the  farmers  well 
learned  the  tricks  of  fraud;  the  preamble  of  a  law,  in  1662,  gave 


12  AMERICA  STRIKES  BACK 

full  particulars.  Hilderkins,  firkins  and  pots  of  butter  and 
cheese  were  given  "false  heavy  weight"  by  loading  them  with 
stones,  iron  wedges,  bricks  and  other  heavy  articles.  "Much 
bad  and  decayed  butter  is  mixed  and  packed  .  .  .  with  sound 
and  good  butter  and  immoderate  quantities  of  salt,  to  the  spoil 
of  the  same  ...  to  the  great  wrong  and  abuse  of  the  navy, 
of  merchants,  traders  and  all  householders."  22  Notwithstand- 
ing penalties,  these  frauds  persisted,  as  related  by  a  law  thirty 
years  later.23 

Another  deep  grievance  was  the  making  of  bad  malt.  Various 
persons,  declared  a  law  in  1548,  "tendring  more  their  own 
private  gain,  lucre  and  profit,  have  now  of  late  by  their  in- 
satiable, covetous  and  greedy  minds,  accustomably  and  com- 
monly made  much  malt  impure  and  unseasonable";  they 
rushed  its  making  in  eight  or  nine  days,  whereas  it  needed  at 
least  twenty-one,  and  not  being  well  dried  the  malt  became 
musty  and  full  of  weevils;  this  impure  stuff  was  mixed  with 
good,  and  the  result  was  unpalatable.24  In  the  reign  of  Queen 
Elizabeth  the  continuance  of  these  frauds  called  forth  another 
punitive  law.25 

The  celebrated  "brown  October  ale"  of  merry  old  England 
was  not,  as  we  see,  then  much  renowned.  In  1604  a  law  or- 
dered forfeiture  of  corrupt  hops;  any  English  brewer  using 
such  substances  was  to  forfeit  the  value  of  the  hops.26  Only 
four  years  prior  to  the  enactment  of  this,  another  law  had  been 
passed  prohibiting  dealers  from  putting  in  Spanish  wine  any 
isinglass,  brimstone,  raisins,  herb  or  other  ingredients.  There 
must  have  been  much  feeling  over  this  fraud;  penalties  were 
made  unusually  heavy — £100  fine  for  every  adulteration  of- 
fence, and  a  £40  fine  for  retailing  such  doctored  liquor.27 

In  the  course  of  centuries  many  changes  took  place  in  re- 
ligion, politics  and  taste;  but  no  revolution  of  any  kind  affected 
the  career  of  trade  fraud.  How  somnolent  the  legislative  mind 
was  inclined  to  become  in  this  domain  was  disclosed  by  a  law 
in  1709.  For  nearly  five  hundred  years  the  statute  which  had 
been  passed  in  1266  was  depended  upon  to  stop  frauds  in  the 
weight  and  price  of  bread.  In  1709  Parliament  woke  up  to  the 
fact  that  "many  of  the  provisions  in  that  old  law  are  obscure 
and  impracticable";  taking  advantage  of  the  same,  "covetous 


FROM  LEGEND  TO  FACT  13 

and  evil-disposed  persons  have,  for  their  own  gain  and  lucre, 
deceived  and  oppressed  her  Majesty's  subjects,  and  more  espe- 
cially the  poorer  sort  of  people."  28  The  law  was  modernized, 
and  heavy  fines  and  other  penalties  inflicted.  But  so  ineffective 
were  these  that  all  through  the  reigns  of  the  four  Georges  and 
far  beyond  need  constantly  arose  for  further  punitive  laws 
aimed  at  adulteration  of  meal,  flour  and  bread. 

Nothing  that  could  be  adulterated  escaped  the  process. 
Adulteration  of  oil  was  old  and  common.  A  law  of  the  reign  of 
Queen  Elizabeth  complained  that  deceitful  mixtures  were  put 
in  honey,  which  was  sold  in  casks  of  deceitful  size.  The  same 
law  related  that  "a  great  part  of  the  wax  made  and  melted  in 
this  realm  hath  of  late  been  found  to  be  very  corrupt  by  reason 
of  the  deceitful  mixture  thereof"  with  resin,  tallow  and  turpen- 
tine. At  a  time  when  candles  were  a  chief  means  of  illumination 
this  fraud  was  condemned  as  especially  heinous;  so,  as  a  posi- 
tive way  of  identifying  culprits,  every  wax  melter  was  required 
to  put  his  mark  upon  his  product,  and  the  defrauded  person 
was  allowed  half  of  the  fine  mulcted  for  adulteration.29 

New  ways  of  defeating  law  were  ever  slily  found.  What  was 
sold  as  tobacco  and  snuff  is  made  clear  from  the  title,  and 
clearer  from  the  text,  of  a  law  in  1715.  "An  act  to  prevent  the 
mischiefs  by  manufacturing  leaves  or  other  things  to  resemble 
tobacco  and  the  abuses  in  making  and  mixing  snuff"  told  how 
tobacco  was  one  of  the  chief  products  of  Virginia  and  Mary- 
land, and  how  walnut-tree,  hops,  sycamore  and  other  leaves 
and  herbs,  plants  or  materials  resembling  tobacco  had  been 
manufactured  and  sold  for  that  product.  A  fine  was  ordered  for 
every  pound  sold,  and  a  like  penalty  for  exportation,  besides 
the  seizure  of  such  goods  and  jail  for  persons  making  them. 
Under  penalty  of  fine  and  forfeiture  the  law  forbade  coloring 
of  snuff,  and  mixing  it  with  fustick,  yellow  ebony,  torchwood 
or  any  other  sort  of  wood,  or  dirt,  sand  or  tobacco  dust.  Four 
years  later  another  act  was  necessary.80 

According  to  a  preamble  of  a  law  in  1781,  "great  frauds  .  .  . 
to  the  great  injury  of  the  fair  trader"  and  the  encouragement 
of  smuggling  had  been  carried  on  by  the  frequent  importation 
into  Great  Britain  of  damaged  coffee  and  cocoanuts  sold  as 
good  quality.  Also,  in  England,  tea-dealers,  who  had  permits 


14  AMERICA  STRIKES  BACK 

certifying  the  good  quality  of  their  tea,  perpetrated  great 
frauds  by  substituting  inferior  tea  while  in  the  act  of  removing 
the  goods  at  night  to  places  of  other  dealers.  The  law  forbade  the 
selling  of  damaged  coffee  or  cocoanuts  above  certain  prices  for 
home  consumption,  and  prohibited  nocturnal  transportation 
of  more  than  six  pounds  weight  of  any  tea  from  one  town  to  an- 
other.31 This  is  the  first  law  in  the  records,  it  may  be  mentioned, 
that  contains  any  reference  to  the  fair  trader,  or  any  distinct 
recognition  of  loss  to  him  from  the  practices  of  fraudulent  com- 
petitors. 


CHAPTER   II 
"AN  ESSAY  UPON  NATIONAL  CHARACTER" 

WAR  profiteering,  through  the  supplying  of  bad  equipment, 
has  an  ancient  history.  It  was  in  malignant  operation  in  Eng- 
land in  1405,  a  preamble  of  a  law  of  that  year  detailing:  "Be- 
cause arrowsmiths  do  make  many  faulty  heads  for  arrows  and 
quarels,  defective,  not  well,  nor  lawful  nor  defensible,  to  the 
great  deceit  and  jeopardy  of  the  whole  realm."  Ordained, 
therefore,  that  henceforth  all  arrow  and  quarel  heads  should  be 
well-boiled  or  brazed,  and  hardened  at  the  points  with  steel. 
Failure  to  do  this,  and  to  place  the  maker's  mark  on  each 
piece,  was  made  punishable  by  forfeiture  of  goods  and  impris- 
onment. Enforcement  was  provided  for  by  giving  Justices  of 
the  Peace  in  every  county  and  bailiffs  in  every  borough  exam- 
ining duties  and  punishing  power.1  In  the  next  century  another 
kind  of  fraud  was  evidenced;  that  of  making  weapons  and  tools 
from  billow-iron  resembling  steel  and  sold  as  steel.  By  this 
fraud,  said  a  law  in  1548,  "necessary  things  having  value  are 
of  little  or  no  value  or  goodness,  to  the  great  hurt  of  the  King's 
loving  subjects."  A  fine  was  put  upon  every  piece  so  sold.2 

Scandals  from  the  equipment  of  English  naval  and  merchant 
vessels  with  spurious  material  were  many.  "For  their  own  pri- 
vate lucre,  certain  evil-disposed  persons  are  deceivably  mak- 
ing" cables,  ropes  and  other  tackle,  began  a  law  of  the  year 
1529.3  Penalties  did  not  discourage  fraud;  in  1593  came  forth 
another  law  the  preamble  of  which  thus  explained  conditions: 

"Forasmuch,  as  it  is  found  by  common  experience,  that  sun- 
dry persons  using  the  trade  of  making  cables,  halfors  and  other 
kinds  of  cordage  within  this  realm,  have  of  late,  for  their  own 
private  lucre  and  gain,  used  to  make  the  same  of  old,  cast  and 
worn-over  cables,  halfors  and  cordage,  and  yet  have  craftily 
and  deceitfully  uttered  and  sold  the  same,  being  tarred  as  new, 

good  and  strong,  and  as  made  of  new  and  perfect  stuff,  cover- 
is 


16  AMERICA  STRIKES  BACK 

ing  and  hiding  the  false  and  corrupt  making  thereof,  by  tar- 
ring of  them  before  the  same  be  put  to  sale: 

"By  reason  whereof,  not  only  divers  ships,  vessels  and  goods 
as  well  of  her  Majesty's  as  of  sundry  of  her  Highness'  sub- 
jects, but  also  the  lives  of  divers  of  her  said  subjects,  have  been 
lost,  perished  and  cast  away."  4 

The  remedy  ordered  was  a  fine  treble  the  value  of  the 
fraudulent  cordage,  and  imprisonment  during  the  Queen's 
pleasure.  Soon — in  1604 — another  kind  of  fraud  had  to  be 
dealt  with — "the  deceitful  making  of  mildernex  and  powle- 
davies,  whereof  sail-cloths  for  the  navy  and  other  shipping  are 
made."  The  preamble  of  the  law  directed  at  this  fraud  told 
that  these  goods  were  made  in  France  until  the  time  of  Queen 
Elizabeth,  when  the  weaving  of  them  was  successfully  in- 
troduced in  England.  The  preamble  went  on  to  say  that  many 
Englishmen  who  were  not  trained  in  this  trade  had,  notwith- 
standing, "upon  desire  of  gain,"  made  of  poor  material  such 
cloths,  which  were  neither  well  woven  nor  of  the  proper  length 
and  breadth.  These  practices  resulted  "to  the  great  damage 
of  his  Highness'  navy,  the  chiefest  strength  of  the  realm."  This 
law  permitted  weaving  only  by  apprentices  who  had  served 
seven  years,  or  by  men  with  a  full  knowledge  of  the  trade; 
prescribed  materials  and  quality;  and  ordered  fines  for  trans- 
gression.5 But  the  frauds  did  not  cease,  or  at  least  were  re- 
sumed, as  was  shown  by  the  passage  of  more  laws  in  the  years 
1736  and  17S1.6 

And  here  the  question  naturally  arises:  What  of  England's 
chief  industry  in  those  days — the  manufacture  and  sale  of 
woolens? 

In  the  thirteenth  century  England  exported  much  wool  and 
made  some  fine  linens.  But  the  main  business  was  controlled 
by  foreigners,  and  the  finances  were  conducted  by  Italians.  The 
English  did  little  navigation  to  other  countries,  and  England's 
produce — raw  wool,  lead,  tin — was  carried  away  by  foreign- 
ers in  foreign  ships,  especially  to  Mediterranean  ports.  In  1381 
came  an  act  prohibiting  all  English  subjects  from  conveying 
merchandise  except  in  English  ships,  and  eighteen  years  later 
the  importation  of  woolen  cloths  into  England  was  forbidden. 


"AN  ESSAY  UPON  NATIONAL  CHARACTER"     17 

How  the  truth  about  conditions  in  this  and  later  times  has 
been  wholly  subverted  is  shown  by  such  volumes  as  Richard 
Chevenix's  "An  Essay  upon  National  Character/'  published 
a  century  ago  in  England.  In  the  England  of  his  time,  standing 
out  as  "the  most  renowned  seat  of  industry,"  great  interest 
was  shown  in  the  history  and  glorification  of  its  industry  and 
commerce.  Chevenix  included  a  sketch  of  the  origin  and  growth 
of  the  woolen  industry,  making  this  positive  statement:  That 
the  fifteenth  century  was  a  disastrous  period  in  England; 
"still,  however,  she  found  means  to  apply  much  attention  to 
her  woolen  manufactures;  and  a  long  list  of  foreign  wares, 
prohibited  in  1463,  shows  that  their  fabrication  at  home  had 
made  their  importation  useless.  These,  too,  principally  con- 
sisted in  woolens.  .  .  ."  Chevenix's  paean  was  hailed  as  a  clas- 
sic, and  has  since  been  much  cited  as  authoritative. 

The  truth  was  precisely  the  opposite  of  the  situation  he  rep- 
resented. We  shall  pass  over  statutes  of  the  years  1433  and 
1439  against  the  selling  of  cloth  defective  in  make  and  meas- 
urement,7 and  let  the  preamble  of  a  law  of  the  year  1464  re- 
count what  actually  was  happening:  "Whereas,  many  years 
past,  and  now  at  this  day,  the  workmanship  of  cloths  and 
things  requisite  to  the  same,  is  and  has  been  of  such  fraud, 
deceit  and  falsity,  that  the  said  cloths  in  other  lands  and  coun- 
tries be  had  in  small  reputation,  to  the  great  shame  of  this 
land;  and  by  reason  thereof,  a  great  quantity  of  cloths  of  other 
strange  lands  be  brought  into  this  realm,  and  here  sold  at  a 
high  and  excessive  price,  evidently  showing  the  offence,  de- 
fault and  falsehood  of  the  making  of  woolen  cloths  of  this 
land."  8  The  law  ordered  the  examining  and  marking  of  all 
goods,  and  the  confiscation  of  those  fraudulent  in  make  or 
measure.  It  prescribed  fines  for  fraud,  and  put  penalties  upon 
the  Keeper  of  the  Seals  if  he  failed  in  his  duty  and  marked 
any  inferior  goods  as  perfect. 

While  Richard  III  was  busy  with  intrigue,  murder  and  bat- 
tle, Parliament  was  contending  with  other  troubles.  The  pre- 
amble of  a  law,  passed  in  1483,  was  a  reproach  and  an  arraign- 
ment. England,  in  the  past,  it  said,  had  been  greatly  enriched 
by  the  making  and  draping  of  woolen  cloth  whereby  many 
people  were  kept  at  work  and  not  fallen  to  idleness  as  daily 


18  AMERICA  STRIKES  BACK 

they  were  now.  "It  is  so  now  that  the  woolen  cloths  which  in 
late  days  have  been  made,  and  being  made,  are  imperfect  and 
deceivably  made  and  wrought,  keeping  neither  length  nor 
breadth."  Further,  the  preamble  complained,  cloth  was 
stretched  instead  of  pre-shrunk;  it  was  made  of  substitute  ma- 
terials; and  poor  dyes  were  used.9 

In  the  reign  of  Henry  VIII  law  after  law  was  enacted  against 
adulteration  of  worsteds,  deceit  in  making  woolen  cloths,  and 
the  false  weighting  of  fleece  with  clay,  lead,  stones,  sand,  tails 
and  other  substances.10  "Forasmuch  as  great  infamy  and  slan- 
der hath  risen  of  late  years  in  sundry  outward  parties  beyond 
the  sea  of  the  untrue  making  of  woolen  cloths  within  this  realm, 
to  the  great  derogation  of  the  common  weal  of  the  same,  and 
the  no  little  hindrance  of  the  sale  of  the  said  commodity."  Thus 
read  the  preamble  of  a  law  in  1535,11  which  closed  one  of  the 
loopholes  left  in  previous  laws  and  provided  new  penalties. 
"Where  heretofore  divers  and  many  goodly  statutes  have  been 
made  for  the  true  making  of  cloth  within  this  realm,  which 
nevertheless  forasmuch  as  clothiers,  some  for  lack  of  knowl- 
edge and  experience,  and  some  of  extreme  covetousness,  do  daily 
more  and  more  study  rather  to  make  many  than  to  make  good 
cloths,  having  more  respect  to  their  private  commodity  and 
gain  than  the  advancement  of  truth  and  continuance  of  the 
commodity  in  estimation,  according  to  the  worthiness  thereof, 
have  and  do  daily — "  but  let  us  interrupt  this  preamble  of 
1552.  Therein  it  is  obviously  enough  set  forth  that  contem- 
porary critics  of  the  since  much  exalted  handicraft  times  did 
not  in  the  least  think  theirs  a  "qualitative"  age.  No  indictment 
of  our  machine-age  "quantitative"  production  could  be  more 
severe  than  that  incorporated  in  this  preamble,  setting  forth 
how  industry  was  then  bent  upon  turning  out  numbers  rather 
than  good  quality  of  cloths.  The  aim  of  unscrupulous  mass  pro- 
duction, as  we  here  indubitably  see,  much  preceded  any  age 
of  machinery. 

That  preamble  had  more  remarks  on  the  ways  of  cloth- 
makers  who,  "instead  of  truth,  practice  falsehoods,  and  instead 
of  substantial  making  of  cloth,  do  practice  slight  and  slender 
making,  some  by  mingling  of  yarns  of  divers  spinning  in  one 
cloth,  some  by  mingling  fell-wool  and  lambs-wool,  or  either  of 


"AN  ESSAY  UPON  NATIONAL  CHARACTER"    19 

them,  with  fleece-wool,  some  by  putting  too  little  stuff,  some  by 
taking  them  out  of  the  mill  before  they  be  full-thicked,  some 
by  over-stretching  them  upon  the  tenter,  and  then  stopping 
with  flocks  such  bracks  as  shall  be  made  by  means  thereof; 
finally,  by  using  so  many  subtile  sleights  and  untruths,  as 
when  the  cloths  so  made  be  put  in  the  water  to  try  them,  they 
rise  out  of  the  same  neither  in  length  or  breadth  as  they  ought 
to  do,  and  in  some  places  narrower  than  some,  besides  such 
cockeling,  bandoning  and  divers  other  great  and  notable  faults, 
as  almost  cannot  thought  to  be  true." 

By  what  inducements  were  the  clothmakers  able  to  pro- 
cure official  complaisance  in  selling  their  spurious  goods?  The 
persuasive  means  were  not  disclosed,  but  the  fact  that  cloth 
manufacturers  did  obtain  it  was  most  clearly  stated:  "And 
yet,  nevertheless,  neither  fearing  the  laws  in  that  case  provided 
nor  regarding  the  estimation  of  their  country  [the  cloth  mak- 
ers] do  not  only  procure  the  aulneger  [a  royal  officer  who  ex- 
amined cloth  in  guarantee  of  its  quality  or  measure]  to  set  the 
king's  seal  on  such  false  untrue  and  faulty  cloth,  but  do  them- 
selves weave  into  the  same  the  likeness  and  similitude  of  the 
King's  highness'  most  noble  and  imperial  crown,  and  also  the 
first  letter  of  his  name,  which  should  be  testimonies  of  truth, 
and  not  a  defiance  of  untruth,  to  the  great  slander  of  the  king 
our  sovereign  lord,  and  the  shame  of  this  land,  and  to  the  utter 
destruction  of  so  great  and  notable  a  commodity,  as  the  like  is 
not  seen  in  any  foreign  nation."  12 

Increasingly  heavy  fines,  forfeiture  of  goods  and  the  pun- 
ishment in  the  pillory  ordered  by  this  law  did  not  decrease 
frauds.  Two  laws  of  Elizabeth's  time  were,  however,  variations 
from  the  general  run.  One  of  these,  in  1585,  gave  the  first 
legislative  sanction  to  the  making  of  "a  base  and  coarse  kind 
of  goods"  for  the  use  of  "the  poorer  sort  of  people";  parts  of 
previous  statutes  prohibiting  the  putting  in  of  hair,  flocks  or 
other  such  materials  were  repealed.  This  law  said  that  the 
intention  was  to  make  statutes  more  applicable  to  the  needs  of 
trade.13  Clothmakers  now  had  authorization  to  do  what  they 
had  always  illegally  done.  In  1597  another  law  of  unusual  tenor 
came  in  response  to  a  petition  of  York,  Lancaster  and  some 
other  clothmakers  themselves,  who  complained:  That  despite 


20  AMERICA  STRIKES  BACK 

the  many  wholesome  laws  compelling  the  making  of  good 
cloths,  abuses  had  not  only  not  been  restrained  but  rather  had 
increased.  This  was  due  either  to  defects  in  the  laws  or  to  lack 
of  their  enforcement.  The  quality  of  cloths  made  in  Northern 
England  "do  yearly  and  daily  grow  worse  and  worse  ...  to 
the  great  deceit  of  all  nations  where  the  said  cloths  and  kersies 
are  sold  and  to  the  great  shame  and  slander  of  the  country 
where  the  same  is  made."  This  law  accordingly  ordered  every 
Northern  cloth  manufacturer  to  affix  a  seal  of  lead  to  every 
piece  of  cloth  attesting  quality  and  quantity,  provided  heavy 
fines  and  forfeitures  for  violations,  and  granted  recovery  of 
damages  to  defrauded  persons.14  The  York  manufacturers 
themselves,  who  helped  in  procuring  this  law,  became  guilty  of 
the  worst  kind  of  frauds,  as  a  later  law  showed. 

The  fact  has  ever  to  be  borne  in  mind  that  increased  penal- 
ties brought  no  results.  In  1605  a  law  of  James  I  declared  for 
a  "true  and  just  commerce  without  fraud  or  deceit";  15  and 
another  in  1623  recounted  that  "many  ill-disposed  persons  for 
their  own  private  gain  and  lucre  and  in  deceit  of  the  buyers  of 
cloth"  were  putting  deleterious  foreign  substances  into  woolen 
cloths.  The  powers  granted  by  this  law  exceeded  those  of  all 
previous  statutes,  in  allowing  inspectors  to  enter  any  man's 
house  suspected  of  containing  fraudulent  cloth;  and  warrants 
could  be  issued  for  the  arrest  of  any  person  even  suspected  of 
making  such  cloth.  Provisions  for  fining  were  drastic.16 

A  detailed  resumption  of  the  fraudulent  making  and  selling 
of  woolen  goods  would  entail  a  needless  account  of  a  multitude 
of  punitive  laws  passed  in  the  seventeenth  and  eighteenth  cen- 
turies. Suffice  it  to  say  that  law  after  law  bemoaned  the  in- 
efficiency of  previous  legislation.  Laws  adopted  in  1662,  1708, 
1711  and  1719,  1723,  1724,  1726,  1734  and  1738  all  succes- 
sively sought  to  prevent  the  making  of  defective  goods,  includ- 
ing stockings,  their  improper  dyeing  and  false  certification. 
Each  of  these  laws  in  turn  decreed  severer  penalties  for  en- 
forcement.17 Finally,  as  a  summary  of  the  whole,  we  come  to 
a  law  enacted  in  1766,  applying  to  York  manufacturers  and 
deploring  the  ineffectuality  of  all  previous  laws  in  removing 
some  of  the  frauds  which  were  still  practiced.  Evidently  de- 
spairing of  compliance  from  the  manufacturers,  this  law  con- 


"AN  ESSAY  UPON  NATIONAL  CHARACTER"    21 

centrated  its  punitive  efforts  upon  inspectors  and  other  official 
examiners  of  cloth.  These  officials  were  made  subject  to  heavy 
fines  for  each  offence  in  falsely  stamping  and  fraudulently  seal- 
ing defective  cloth,  and  were  liable  to  removal  from  office.18 

Conspicuously  through  these  centuries  stands  out  the  grim 
resolution  of  British  industry  in  contesting  with  law  and  its 
proficiency  in  strategems  for  evading  the  statutes.  Historians 
have  noted  the  prevalence  of  other  kinds  of  lawlessness  in 
Britain  during  these  eras,  but  have  had  nothing  to  say  of  the 
defiant  and  incurable  lawlessness  of  rampant  materialism.  In 
an  essay  "On  Fraud,"  Bishop  Thomas  Wilson,  an  eminent 
English  prelate  of  the  eighteenth  century,  noted:  "But  the  sins 
of  injustice  which  are  most  common,  and  least  taken  notice 
of,  are  such  as  are  committed  in  the  way  of  trade  and  bar- 
gains." If,  he  added,  the  degree  of  crimes  was  to  be  measured 
by  the  opinion  the  world  had  of  them,  then  "we  should  only 
make  a  jest  of  taking  advantage  of  and  cheating  one  another, 
as  it  is  too  common." 


PART  TWO 
MERCANTILE  DOMINATION 


CHAPTER  III 
ACANADA 

WHEN  Spanish  explorers  first  gazed  at  the  mouth  of  the  St. 
Lawrence  River  "lined  with  mountains  and  covered  with  snow'7 
they  named  the  uninviting  country  Acanada — "Here  is  noth- 
ing." l  But  this  judgment  turned  out  to  have  been  unfounded; 
from  the  contiguous  waters  and  from  inland  came  a  great  sup- 
ply of  valuable  products.  The  fisheries  attracted  a  multitude 
of  European  traders  assured  of  large  profits  from  the  great 
demand  for  fish  especially  in  Roman  Catholic  countries,  and, 
with  a  single  whale  frequently  yielding  as  many  as  four  hun- 
dred barrels  of  oil,  profits  from  whaling  were  temptingly  large. 

From  Spain,  England,  France  and  Holland  came  vessels  to 
load  themselves  with  abundant  sea-spoils.  Following  Carder's 
example  in  1541  of  manning  his  armed  ships  with  convicts  from 
French  jails,  some  French  mariners  obtained  crews  by  getting 
official  permission  to  commandeer  men  and  women  prisoners 
from  Brittany  and  Normandy;  but  many  of  these  individuals, 
mendicants  by  profession  and  imprisoned  for  that  offence,  could 
not  stand  the  rigors  of  winter  voyage,  and  died.2  In  1578  there 
were  thirty  to  fifty  English  fishing  sail,  and  perhaps  two  hun- 
dred vessels  from  Spain  on  the  Newfoundland  Banks;  twenty 
Biscay  vessels  were  engaged  in  whale  hunting.  Seven  years 
later  the  fishing  fleet  mounted  to  three  hundred  Spanish, 
French,  English  and  Dutch  vessels.  A  quarter  of  a  century 
later  the  French  fishing  fleet  alone  comprised  six  hundred 
vessels,  or  thereabouts. 

From  the  fishing  industry  there  ensued  a  traffic  at  first 
auxiliary  but  subsequently  becoming  the  principal  trade,  yield- 
ing great  profits,  inciting  conflicts,  having  its  influence  in  fo- 
menting wars,  and  directly  or  indirectly  causing  a  great  and 
continuous  sacrifice  of  human  life.  This  was  the  fur  trade,  the 
main  and  long-continued  source  of  primitive  accumulation  of 

25 


26  AMERICA  STRIKES  BACK 

wealth  in  vast  parts  of  the  North  American  continent.  During 
centuries  the  great  bulk  of  this  wealth  from  Canada  and  other 
sections  went  to  European  beneficiaries  to  be  successively  in- 
vested in  land,  banks,  trade,  factories,  and  transportation  sys- 
tems, in  Europe  and  other  continents. 

Upon  going  ashore  in  Canada  to  dry  fish,  traders  soon 
learned  both  of  the  prevalence  of  fur-bearing  animals  and  the 
absurd  cheapness  with  which  these  furs  could  be  bought  from 
the  unsophisticated  Indians.  A  needle,  a  harness  bell  or  a  tin 
mirror  could  be  traded  for  a  beaver  skin.3  Potations  of  liquor 
assisted  the  arts  of  persuasion.  When,  upon  their  return  to 
Europe,  fishing  traders  displayed  their  cargoes  of  furs  and 
told  how  they  were  obtained,  the  more  quick-minded  merchants 
of  the  seaports  were  greatly  excited  by  the  wealth-producing 
certainties  of  the  fur  trade. 

At  first  more  or  less  of  an  individual  venture,  fur-trading 
soon  became  an  enterprise  carried  on  by  charter.  A  French 
corporation,  Champlain's  Company,  the  shares  of  which  were 
apportioned  among  merchants  of  Rouen  and  St.  Malo,  was 
chartered  in  1614  upon  condition  of  certain  colonizing  per- 
formances. These  the  company  did  not  take  seriously,  sending 
but  a  solitary  family  to  Canada.  Its  monopoly  was  abolished 
in  1620,  and  the  next  year  a  charter,  requiring  colonization  by 
settlers  and  missionaries,  was  granted  to  the  Company  of  De 
Caen,  organized  by  William  De  Caen  and  his  nephew,  Rouen 
merchants.  Champlain's  Company  and  the  Company  of  De 
Caen  united  in  a  trading  agreement,  continuing  operations  un- 
til 1633  but  having  to  meet  the  competition  of  the  Company 
of  New  France  established  in  1627  by  Cardinal  Richelieu. 

Differing  from  the  previous  companies,  the  backers  of  the 
Company  of  New  France  were  not  small-town  merchants;  its 
leading  stockholders  were  Parisians.  The  company  was  granted 
a  full  monopoly  lasting  fifteen  years  and  complete  trading  con- 
trol of  the  entire  St.  Lawrence  Valley,  and  was  required  to 
introduce  three  hundred  colonists  annually.  This  obligation 
was  only  nominally  performed,  yet  somehow  the  Company 
of  New  France  contrived  to  hold  its  monopoly  until  1663  when 
its  charter  was  revoked.  Then  followed  the  Company  of  the 
West  Indies,  chartered  by  Louis  XIV  in  1664.  The  ostensible 


ACANADA  27 

object  for  which  this  company  was  empowered  was  the  con- 
version of  Indian  tribes  to  Christianity,  but  its  privileges  com- 
prehensively covered  trading  rights  on  the  West  Coast  of 
Africa,  the  East  Coast  of  South  America,  and  in  Canada,  Aca- 
dia  and  Newfoundland.  Apparently  the  officials  of  this  company 
were  more  concerned  in  stock-jobbing  than  in  directing  the 
routine  of  trade;  while  they  were  thus  pocketing  booty  the 
company's  affairs  languished,  and  its  charter  was  canceled  in 
1675.  There  came  into  being  various  other  French  companies, 
the  most  important  of  which  was  the  French  East  India  Com- 
pany, having  the  sole  privilege  of  exporting  beaver  from 
Canada. 

There  are  no  extant  reports  of  the  profits  made  by  the  vari- 
ous French  companies  from  the  fur  trade,  but  ample  records 
exist  showing  the  methods  followed  and  giving  some  indica- 
tion of  the  traffic's  magnitude.  To  a  considerable  extent  the 
companies  had  to  depend  upon  itinerant  traders  who  penetrated 
afar  among  the  Indian  tribes  and  brought  back  their  bales  of 
furs.  But  as  no  one  could  trade  with  the  Indians  without  an  an- 
nual license,  and  as  such  permits  were  made  a  matter  of  favorit- 
ism and  jobbery  by  French  officials  who  granted  or  annulled 
them  at  will,  the  state  of  the  fur  trade  was  entirely  lacking  in 
system.  Having  only  precarious  licenses,  French  traders  could 
make  no  permanent  establishments  of  any  importance,  but 
roamed  wherever  opportunities  of  fur-gathering  were  greatest. 

The  debauching  of  Indians  with  intoxicating  liquor,  chiefly 
brandy,  entailed  such  demoralization,  conflicts  and  atrocities 
that,  on  April  17,  1664,  the  Sovereign  Council  of  Canada,  com- 
posed of  French  officials,  issued  a  drastic  decree  prohibiting 
barter  of  liquor  or  giving  it  in  trade  to  Indians.4  Safe  from  the 
reach  of  enforcing  officers,  traders  did  not  diminish  their  de- 
bauching operations.  The  failure  of  this  decree  prompted  the 
Sovereign  Council  four  years  later  to  give  permission  to  all 
Frenchmen  in  Canada  to  sell  and  deliver  liquor  freely  to  In- 
dians; the  justification  advanced  was  that  freedom  of  sale 
would  cause  less  demoralization  than  a  restraint  the  attempted 
enforcement  of  which  was  impracticable.5 

Another  effort,  this  time  partial,  to  curtail  the  evils  was  made 
in  the  next  year,  when  a  proclamation  prohibited  traders  from 


28  AMERICA  STRIKES  BACK 

lying  in  wait  in  the  woods  for  Indians,  or  going  to  meet  them 
there.6  Frequent  energetic  protests  also  were  made  by  prelates 
and  missionaries  in  Canada  against  traders'  methods  of  mak- 
ing the  Indians  drunk  so  as  to  get  their  furs  for  little  or  noth- 
ing; and  the  protest  graphically  set  forth  the  role  of  liquor  in 
devastating  settlements  and  engendering  immorality,  theft  and 
murder.7 

Animosity  among  officials  aroused  by  differences  as  to  their 
priority  and  respective  sphere  of  authority,  or  disputes  caused 
by  contentions  over  rival  trading  groups,  likewise  provoked  dis- 
closures. In  1670  one  Perrot  was  appointed  Governor  of  Mon- 
treal. Although  on  a  small  salary,  he  managed  by  benefit  of 
illegal  trade  with  the  Indians  to  become  speedily  wealthy. 
Jacques  Duchesenau,  Intendant  of  Canada's  Police,  Justice  and 
Finance,  formally  accused  Perrot  of  having  thus  illegitimately 
pocketed  40,000  livres  (approximately  $10,000),  then  an  en- 
viable sum,  in  a  single  year. 

In  one  of  his  arraignments  Duchesenau  declared  that  "the 
desire  of  making  money  everywhere"  had  led  Perrot  and  others, 
including  relatives,  to  violate  their  own  official  edicts  by  ship- 
ping on  canoes  an  enormous  aggregate  of  beaver  furs  to  Eng- 
lish dealers  who  gave  double  the  price  paid  by  French  fur 
merchants  in  Quebec.  "Violence,  upheld  by  authority,  decides 
everything,"  Duchesenau  reported.  "The  force  the  Governor 
[of  Montreal]  has  at  his  hand  sustains  his  interests,  and  he 
employs  it  only  to  intimidate  the  people,  so  as  to  prevent  them 
from  complaining.  .  .  ."  8  Functionary  DeMeulles  complained 
to  the  king,  in  1684,  that  in  the  course  of  Governor  Perrot 's 
partnership  with  Quebec  merchants  and  their  aim  to  monopolize 
all  the  trade  of  the  West,  Perrot  had  incited  war  with  the 
Iroquois.  But  the  year  before,  it  appears,  DeMuelles  himself 
had  advised  attacking  the  tribe,  "who  must  be  humbled  or 
annihilated  in  the  interests  of  trade."  9 

A  remonstrance  made  by  Bishop  Laval  to  Louis  XIV,  in 
1677,  against  the  widespread  debauchery  of  Indians  was  fol- 
lowed by  the  ordering  by  Colbert,  Louis'  Minister  of  Finance, 
of  "Twenty  Principal  Inhabitants"  of  Canada  to  make  in- 
quiry. All  of  these  persons,  however,  were  themselves  engaged 
in  the  fur  trade.  Their  report  accordingly  minimized  the  extent 


ACANADA  29 

of  the  use  of  liquor  in  fur  trading,  and  declared  that  its  inter- 
diction " would  ruin  trade,  without  any  equivalent  and  without 
remedying  the  evils"  because  in  territories  in  far  west  Canada 
in  which  the  English  operated,  and  in  areas  south  controlled  by 
English  and  Dutch,  those  nationalities  "will  sell  it  [liquor] 
freely  to  the  Indians,  and  will  attract  to  themselves  both  the 
Indians  and  the  trade  in  furs."  10  Indignantly  criticizing  this 
report,  the  author  of  Bishop  Laval's  biography  asked  what  were 
the  returns  for  so  many  hideous  evils  arising  from  the  de- 
bauchery of  Indians?  "A  few  dozen  rascals  enriched,  returning 
to  squander  in  France  a  fortune  shamefully  acquired."  ll 

Opposition  of  conscientious  clergymen  in  Canada  to  the  in- 
famies of  such  a  trade  was  overcome  by  the  merchants  who 
sent  specious  and  successful  pleas  to  the  king  at  Versailles,  and 
represented  that  the  brandy  traffic  gave  France  an  advantage 
over  Holland  and  England.  Frequent  memorials  to  King  Louis7 
ministers  set  forth  the  horrors  caused  by  the  Indians'  imbibing 
of  brandy.  For  example,  the  Marquis  de  Demonville  wrote,  in 
January,  1690,  to  the  Marquis  de  Seignelay:  "There  is  no 
crime  that  they  do  not  perpetrate  in  their  excesses.  A  mother 
throws  her  child  into  the  fire;  noses  are  bitten  off;  this  is  a 
frequent  occurrence.  It  is  another  Hell  among  them  during 
these  orgies,  which  must  be  seen  to  be  credited.  .  .  ."  12  Sev- 
eral Indian  tribes  and  a  number  of  chiefs  had  earnestly  and 
pathetically  implored  French  officials  not  to  allow  liquor  among 
them.  Siding  with  the  merchants,  however,  the  royal  govern- 
ment instructed  the  Bishop  of  Quebec,  in  1691,  to  prevent  the 
clergy  from  "disturbing  consciences."  13 

With  little  actual  money  circulating  in  great  parts  of  Canada, 
beaver  furs  became  the  accepted  medium  of  exchange,  although 
at  times  the  want  of  currency  was  made  up  by  a  fiat  issue  called 
"card  money."  Transported  to  Europe,  however,  furs  brought 
payment  in  gold  and  silver.  Almost  the  entire  population  of 
Canada,  18,000  or  20,000  in  all,  was  engrossed  in  the  fur  trade. 
"Beaver,"  wrote  Intendant  Randot  of  Canada  in  his  "Me- 
morial" to  Versailles,  July  16,  1708,  "have  always  been  looked 
upon  here  as  a  mine  of  gold  of  which  everyone  wanted  to  take 
his  share.  The  settlers  spent  their  time  hunting  in  the  woods, 
preferring  a  life  of  adventure  in  the  woods,  which  brought  them 


30  AMERICA  STRIKES  BACK 

large  profits  with  little  toil,  to  the  cultivation  of  the  land  which 
requires  assiduous  labor."  14 

Although,  to  a  small  extent,  the  utilization  of  Canada's  rich 
timber  resources  had  begun  in  1686  when  Quebec  merchants 
built  a  ship  to  carry  boards  to  La  Rochelle,  France,  and  there 
was  some  slight  cattle-raising  and  wheat  cultivation,  the  fur 
trade  long  remained  dominant.  Randot  urged  the  French  Gov- 
ernment, by  finding  a  market  for  the  products,  to  induce  the 
people  to  take  up  agriculture,  lumbering,  ship-building,  to  de- 
velop the  greater  possibilities  of  the  fish  and  whale  oil  trade, 
and  to  exploit  the  coal,  feldspar  and  gypsum  deposits  of  Cape 
Breton.15  But  with  powerful  interests  in  Canada,  reflected  in 
the  Government  of  France,  feverishly  involved  in  the  get-rich- 
quick  opportunities  of  the  fur  trade,  the  course  advocated  by 
Randot  was  treated  as  absurd. 

During  the  entire  time  when  the  Dutch  and  English,  Spanish 
and  French  ruled  American  territory — during  the  period  of  Can- 
ada's domination  by  the  French,  and  of  its  passing  under  Brit- 
ish sovereignty — European  publications  made  no  criticism  of 
the  wealth-seeking  spirit  rampant  in  those  possessions.  En- 
couraged by  European  governments,  that  spirit  fostered  the 
eager  aim  of  European  merchants  and  corporations,  and  was 
generally  applauded  in  Europe  as  natural  and  gratifying.  So 
long  as  European  nations  owned  and  domineered  over  those 
lands  this  course  was  approved  as  proper  and  requisite. 

But  when  American  colonists  increasingly  defied  British  re- 
strictive acts,  declared  for  democratic  rule,  and  later  revolted 
and  achieved  independence,  there  arose  a  new  standard  of 
judgment.  In  no  sense,  of  course,  did  Europe  relinquish  any  of 
the  money-making  aims  which  had  so  long  instigated  its  activi- 
ties. European  critics  of  Americans  on  the  other  hand,  converted 
into  odium  what  European  nations  had  acclaimed  in  themselves 
as  a  high  merit.  The  development  by  Americans  of  their  nat- 
ural resources  was  listed  as  one  irrefutable  proof  of  the  avarice 
passionately  imbuing  the  American  temperament.  Throughout 
the  centuries  when  colonists  of  European  nativity,  employment 
or  attachment  roved  promiscuously  to  gather  furs,  no  European 
criticism  was  made  of  a  mode  of  life  ensuring  products  and 
profits  to  European  beneficiaries.  But  in  the  later  eighteenth 


AC  AN  AD  A  31 

century  and  in  the  early  nineteenth,  when  hosts  of  Americans 
uprooted  themselves  from  eastern  homes  to  pioneer  settlement 
in  the  Middle  West,  this  migration  was  scathingly  condemned 
by  European  critics  as  attesting  the  instability  and  money-lust 
of  the  American  character. 


CHAPTER   IV 
THE  LORDS  OF  TRADE 

THE  practically-minded  English  ruling  and  trading  classes  took 
early  steps  to  make  the  development  of  trade  and  jurisdiction 
over  it  a  regular  and  systematic  branch  of  government.  Un- 
like other  nations,  the  English  were  sagaciously  alert  to  the 
folly  of  leaving  deliberations  respecting  trade  to  the  ignorance 
of  nondescript  assemblies  or  to  ministerial  functionaries  ex- 
perienced only  in  political  machination.  Although,  as  a  matter 
of  caste  pride,  England's  aristocracy  might  profess  to  disdain 
trade  as  sordid,  this  attitude  did  not  deter  a  number  of  nobles 
from  joining  in  the  move  to  create  government  trade  boards 
under  the  guidance  of  which  England's  already  large  trade 
could  be  swelled. 

So  there  came  into  existence  the  Council  of  Trade,  estab- 
lished by  Charles  II,  on  November  7,  1660,  to  determine  ways 
and  means  of  extending  English  trade  and  navigation.  Less 
than  a  month  later  was  initiated  a  body  of  far  wider  and  more 
authoritative  scope — the  Council  of  Foreign  Plantations.  This 
comprised  a  notable  array  of  peers — the  Earl  of  Southampton, 
the  Earl  of  Manchester,  the  Earl  of  Marlborough,  the  Earl  of 
Lincoln,  Viscount  Say,  Lords  Hyde,  Dacre,  Willoughby,  Rob- 
erts and  Berkeley — associated  with  whom  was  a  group  of  keen 
merchants. 

Royal  instructions  to  the  Council  for  Foreign  Plantations 
endued  it  with  comprehensive  powers  of  supervising  the  prod- 
uce, shipping,  trade  and  related  affairs  of  all  colonies,  and 
the  regulation  of  them  by  one  management  giving  orders  from 
London.  The  conventional  provision  requiring  " effectual  care 
in  propagating  the  Gospel"  was  not  omitted.  England's  colonies 
were  already  numerous;  and  in  1664  its  wresting  of  the  Prov- 
ince of  New  York  from  the  Dutch  added  another  section  to 
the  tier  of  American  colonies  subject  to  the  powers  of  the 

32 


THE  LORDS  OF  TRADE  33 

Council  for  Foreign  Plantations.  All  of  these,  and  still  greater 
powers,  were  finally  lodged  in  the  Board  of  Trade,  which  in 
1696  was  established  on  a  permanent  basis. 

The  Board  of  Trade  was  an  extraordinary  institution.  It 
kept  scrutiny  upon  every  phase  of  England's  trade,  and  ex- 
ercised sweeping  and  arbitrary  powers  in  American  and  other 
colonies.  Officially  and  otherwise  it  was  always  impressively 
addressed  as  "The  Lords  of  Trade."  British  governors  in 
America  had  minutely  to  report  to  it  every  public  happening 
of  whatever  nature.  The  Board  of  Trade  passed  upon  and 
either  approved  or  rejected  colonial  legislation,  and  decided 
the  fate  of  land  grants  in  America.  It  vetoed  a  New  York 
Charter  of  Liberties  and  Privileges;  commanded  what  should 
be  the  quotas  of  soldiers  furnished  by  the  respective  colonies; 
passed  upon  colonial  acts  for  paying  debts;  and  made  a  multi- 
tude of  other  such  decisions.1 

Succeeding  Benjamin  Fletcher  as  Captain-General  and  Gov- 
ernor of  New  York  and  Massachusetts  Bay,  Lord  Bellomont 
reported  to  the  Board  of  Trade,  on  June  22,  1700,  that  he, 
Bellomont,  had  been  offered  a  bribe  of  £10,000  in  money  to 
confirm  title  to  a  vast  area  in  New  Hampshire  claimed  by 
Colonel  Samuel  Allen.  In  other  reports  Bellomont  gave  the 
specific  facts  dealing  with  huge  areas  that  Fletcher  had  been 
bribed  to  grant.  Captain  John  R.  N.  Evans  had  been  presented 
with  an  estate,  running  forty  miles  one  way  and  thirty  the 
other,  on  the  west  bank  of  the  Hudson.  Nicholas  Bayard,  said 
to  have  been  intermediary  in  arranging  the  price  that  sea 
pirates  paid  for  Fletcher's  protection,  received  a  grant  of  the 
same  size  in  New  York.  Colonel  Henry  Smith  obtained  from 
Fletcher  an  area  fifty  miles  in  length  on  Nassau — now  Long 
Island.  To  Henry  Beekman  went  a  grant  of  two  New  York 
tracts,  one  sixteen  miles  long,  the  other  twenty  miles  along  the 
Hudson  and  running  eight  miles  inland.  Also  by  Fletcher's 
grace,  Peter  Schuyler  and  associates  had  conjointly  secured  a 
grant  of  land  fifty  miles  long  in  the  Mohawk  Valley.  Lord 
Bellomont  reported  these  to  the  Board  of  Trade  as  some  of 
the  enormous  estates  created  by  "Colonel  Fletcher's  intolerable 
selling  away  of  the  lands  of  this  Province";  bribes  paid  to 
Fletcher,  Bellomont  intimated,  totalled  at  least  £4,000.2 


34  AMERICA  STRIKES  BACK 

Bellomont  succeeded  in  having  the  New  York  legislature  nul- 
lify the  grants  to  Evans  and  Bayard,  and  two  small  grants.  A 
subsequent  legislature  repealed  the  voiding  act,  but  the  Board 
of  Trade  ordered  that  the  invalidating  act  should  stand.  Bello- 
mont's  efforts  to  confiscate  the  other  extravagant  grants  were 
thwarted,  and  the  Board  of  Trade  took  no  action  upon  his  plea 
to  restrain  all  colonial  governors  from  granting,  without  ex- 
press royal  permission,  more  than  a  thousand  acres  to  any  man. 
In  a  formal  complaint  to  Secretary  of  State  Vernon,  in  London, 
the  outspoken  Bellomont  charged  that  one  of  the  members  of 
the  Board  of  Trade  regularly  sold  appointments  to  offices  in 
America  "to  any  sort  of  trash  that  will  give  him  money."  3 

An  order,  on  September  26,  1722,  of  the  Board  of  Trade  to 
procure  an  act  voiding  remaining  exorbitant  grants  was  never 
carried  out.  The  desideratum  most  influencing  that  body  was 
the  aim  to  get  and  reserve  for  the  British  navy  the  fine  timber 
growth  on  those  lands.  Most  of  the  grants  however,  remained 
in  possession  of  the  grantees  and  of  their  heirs;  Lieutenant- 
Governor  Cadwallader  Golden,  in  a  communication  on  Septem- 
ber 20,  1764,  to  the  Board  of  Trade,  told  how  three  of  the 
grants  each  contained  more  than  1,000,000  acres,  and  several 
others  200,000  each.  Under  the  terms  of  the  grants,  the  propri- 
etors were  virtually  made  hereditary  members  of  the  legisla- 
ture, while  the  owners  of  other  great  grants  were  so  opulent 
that  they  commanded  their  own  constant  election  to  the  legis- 
lature.4 

Meanwhile,  expanding  in  all  directions,  English  materialism 
had  not  overlooked  Canada.  Ten  years  after  establishing  the 
Council  of  Trade,  Charles  II,  in  1670,  granted  to  a  group  of 
intimates,  servitors  and  merchants  a  perpetual  charter  for  the 
exploitation  of  western  Canada.  The  incorporators  of  the  Hud- 
son Bay  Company — formally  styled  "The  Governor  and  Com- 
pany of  Adventurers  Trading  into  Hudson's  Bay" — were 
Prince  Rupert,  Count  Palatine  of  the  Rhine,  Duke  of  Bavaria, 
Cumberland,  etc.;  the  Duke  of  Albermarle,  otherwise  General 
Monk,  who  had  been  the  chief  instrument  in  restoring  Charles 
to  the  throne;  the  Earl  of  Craven,  Lord  Arlington,  and  Lord 
Ashley,  together  with  Sir  John  Robinson,  Sir  Charles  Vyner 


THE  LORDS  OF  TRADE  35 

and  other  knights  and  various  London  merchants.  Granted 
upon  the  nominal  condition  of  the  company's  discovering  a  new 
passage  to  the  South  Sea,5  the  charter  endowed  the  company 
with  an  exclusive  monopoly  of  trade  and  commerce  of  all  waters 
and  lands  in  whatever  latitude,  within  and  adjacent  to  the  en- 
trance of  Hudson's  Straits,  provided  such  territories  are  "not 
now  possessed  by  any  of  our  subjects  or  the  subjects  of  any 
other  Christian  Prince  or  State." 

At  the  identical  time  that  Charles  munificently  conferred 
this  charter,  Canada  was  claimed  as  French  territory;  in  fact 
the  king  of  France,  forty-three  years  previously,  had  granted 
a  like  charter  to  a  French  company.  Not  until  more  than  a 
century  after  the  grant  of  the  Hudson  Bay  Company  charter  did 
Canada  come  by  conquest  under  British  sovereignty.  In  later 
times  when  the  legality  of  the  Hudson  Bay  Company  was  at- 
tacked, this  asserted  usurpation  was  made  one  of  the  strongest 
arguments.  Familiar  with  the  historic  boundaries  of  Canada, 
William  McD.  Dawson,  head  of  the  Crown  and  Forests  Branch 
of  the  Government  at  Toronto,  insisted  before  an  investigating 
committee  that  the  early  boundaries  of  Canada  or  New  France 
indisputably  included  the  whole  of  Hudson's  Bay,  and  a  peti- 
tion from  the  Toronto  Board  of  Trade  made  the  same  declara- 
tion.6 

Exclusive  trading  and  commercial  rights  were,  however, 
only  part  of  the  sweep  of  powers  granted  to  the  Hudson  Bay 
Company.  It  was  given  possession  of  lands,  mines,  minerals, 
timber,  fisheries  and  other  resources  in  its  huge  domain.  Em- 
powered with  governing  functions  it  could,  suiting  its  will  or 
purposes,  appoint  all  officials,  including  judges,  and  make  or 
revoke  laws,  ordinances  and  regulations.  Also,  it  could  freely 
inflict  penalties  and  punishments,  "provided  the  same  are 
reasonable,  and  not  repugnant  to  the  laws  of  England."  This 
qualifying  provision  did  not  detract  from  the  company's  arbi- 
trary powers,  exercised  as  they  were  in  a  far-away  region, 
whence  news  could  only  with  difficulty  reach  England.  To  en- 
sure adequate  protection  of  its  properties  the  company  was 
granted  the  right  to  build  forts,  employ  an  armed  force,  and 
take  other  forcible  measures.  In  return  for  its  colossal  powers 
all  that  the  charter  required  was  a  ceremonious  triviality: 


36  AMERICA  STRIKES  BACK 

whenever  the  king  or  any  of  his  successors  entered  the  com- 
pany's territories,  the  royal  visitor  should  receive  two  elks  and 
two  black  beavers.7 

So  was  launched,  equipped  with  mighty  and  extensive  pow- 
ers, a  corporation  the  enormously  profitable  career  of  which, 
in  one  way  or  another,  has  continued  to  the  present  time.  The 
Hudson  Bay  Company  ranked  among  the  foremost  of  Eng- 
land's overseas  corporations  as  a  ceaseless  source  of  wealth. 
This  wealth  was  an  important  part  of  the  capital  successively 
invested  in  English  industries  and  finance,  and  in  Canadian 
or  foreign  enterprises.  Apart  from  the  English  stockholders, 
a  line  of  the  Hudson  Bay  Company's  directing  officials  in 
Canada  emerged  to  become  in  course  of  time  magnates  con- 
trolling or  swaying  huge  land  possessions,  and  great  banking 
and  transportation  systems. 

From  the  Hudson  Bay  Company's  inception  its  capacity  to 
ensure  profits  caused  jubilation  among  the  interested  in  Eng- 
land. The  dimensions  of  those  profits  is  not  assumed;  exact  or 
fairly  exact  facts  were  set  forth  in  the  subsequent  statement 
of  J.  H.  Pelley,  sometime  Governor  of  the  Hudson  Bay  Com- 
pany. A  summons  from  the  Lords  of  the  Committee  of  Privy 
Council  for  Foreign  Trade  ordered  him,  in  1838,  to  inspect 
the  company's  old  ledgers  and  report  findings.  In  a  communi- 
cation stamped  Hudson  Bay  House  and  dated  February  7, 
1838,  Pelley  informed  the  committee:  "Between  the  years  1670 
and  1690,  a  period  of  twenty  years,  the  profits  appear  to  have 
been  very  large,  as,  notwithstanding  losses  sustained  by  the 
capture  of  the  company's  establishments  in  the  year  1682  to 
1688,  amounting  to  £118,014,  they  [the  Company]  were  en- 
abled to  make  a  payment  to  the  proprietors  in  1684  of  50  per 
cent,  and  a  further  payment  in  1689  of  25  per  cent." 

At  the  time  of  their  distribution  these  dividends  were  praised 
as  a  brilliant  showing  for  a  company  in  its  merest  beginnings, 
and  were  heralded  as  a  forerunner  of  still  greater  benefits.  En- 
thusiasm took  the  substantial  form  of  lavish  stock-watering.  In 
the  year  1676  the  amount  of  the  company's  stock  was  £10,500. 
Fourteen  years  later,  by  sheer  manufacture  of  additional 
shares,  the  capital  stock  was  expanded  to  £31,500,  and  simul- 


THE  LORDS  OF  TRADE  37 

taneously  stockholders  received  a  payment  of  25  per  cent  on 
the  new  stock.  Later,  by  the  same  inflation,  the  stock  was  again 
trebled,  making  £94,500;  and  a  slight  new  subscription  of 
£3,150  in  funds  was  converted  into  thrice  the  amount  in  stock. 
Such  was  the  extent  of  the  stock-watering  that  of  the  total 
capital  of  £103,950  on  December  23,  1720,  only  £13,150  rep- 
resented payment  in  money.8 

After  examination  of  the  company's  returns  during  more 
than  its  first  century  of  operations,  as  nearly  as  he  was  able 
to  ascertain  from  the  "defective  state  of  the  books,"  Pelley 
submitted  data  which  sufficiently  evidenced  the  company's 
steady  prosperity,  irrespective  of  setbacks.  French  capture,  in 
the  years  1692-1697,  of  some  of  its  posts  and  their  contents, 
had  entailed  losses  to  the  company  of  £97,500;  consequent  de- 
pletion of  funds  made  necessary  the  borrowing  of  money  at  six 
per  cent.  Nevertheless,  so  rapidly  did  mounting  profits  over- 
come these  factors  that  the  company  was  able,  in  the  year  1720, 
"again  to  treble  their  stock  with  a  call  of  only  10  per  cent  on 
the  proprietors."  And  despite  more  losses  incurred  in  the  year 
1782  from  French  aggression,  the  company,  as  indicated  by  its 
ledgers,  apparently  paid  dividends  of  5  to  12  per  cent,  amount- 
ing to  an  annual  average  of  9  per  cent  and  showing,  Pelley  ex- 
plained, "during  the  past  century,  profits  on  the  originally 
subscribed  capital  stock,  actually  paid  up,  of  between  60  and  70 
per  cent  per  annum  for  the  years  1690  to  1800."  9 

How  was  the  Hudson  Bay  Company  able  to  transform  the 
wastes  of  a  remote  region  into  vast  profits?  By  the  force  of 
its  trading  methods.  The  company's  rigorous  exploitation  of 
Indian  tribes  was  its  chief  persistent  end,  but  auxiliary  to  this 
was  an  oppression  of  its  employes,  then  classed  in  the  menial 
and  submissive  station  of  "servants."  Any  independent  motion 
on  their  part  was  punished  by  a  beating,  if  not  worse;  and  if 
any  white  man,  without  authority  from  the  company,  was  de- 
tected trading  with  the  Indians,  he  was  lashed.  The  Hudson 
Bay  Company's  methods  of  trading  with  Indians  both  followed 
and  exceeded  those  of  other  companies.  For  furs  the  company 
bartered  brandy,  tobacco,  blankets,  beads  and  other  wares; 
its  domain  was  a  wide  outlet  for  imposing  upon  natives  the 


38  AMERICA  STRIKES  BACK 

spurious  goods  made  in  England.  Shortweight  in  sale  of  goods 
to  Indians  was  also  a  fixed  practice.  Lashing  was  the  reprisal 
wreaked  upon  Indians  if  they  complained  of  having  been 
cheated. 

At  first  liquor  was  shipped  from  Europe  in  large  barrels,  but 
difficulties  in  overland  transportation  taught  the  convenience 
of  using  small  kegs.  When  these  reached  their  destination,  the 
contents  were  liberally  diluted  with  water,  the  larger  bulk 
manifestly  bringing  greater  returns  in  furs.  Excesses  in  cruelty 
and  in  debauchery  of  Indians  eventually  led  to  disclosures 
brought  to  England  by  employes  who  had  been  either  sufferers 
from  brutality  or  witnesses  of  its  perpetration.  A  Parliamentary 
investigation  in  the  year  1749  resulted.  In  his  book  published 
in  1752,  Joseph  Robson,  fresh  from  experiences  in  Hudson 
Bay  territory,  declared  that  the  company  never  gave  orders 
for  "virtue  and  sobriety  until  after  several  hearings  in  which 
its  barbarity  to  the  natives  and  their  [the  company's]  servants 
was  proved  by  sundry  affidavits."  10 

As  events  proved,  this  display  of  reformation  was  superficial 
and  ephemeral.  It  was  done  for  public  effect  following  the  1749 
investigation.  Reserving  to  itself  the  exclusive  right  not  only 
to  sell  but  to  raise  produce,  the  Company  forced  Indians  to 
trade  with  it  on  its  own  hard  terms  or  otherwise  subsist  upon 
hunting.  But  the  Indians  had  become  wholly  accustomed  to 
the  use  of  guns,  and  from  the  company  only  could  they  buy 
ammunition.  Denial  of  this  brought  either  starvation  or  re- 
course to  cannibalism,  both  of  which  tragic  results  were  not 
uncommon.11 

In  no  respect,  though,  did  the  Parliamentary  investigation  of 
1749  impair  the  Hudson  Bay  Company's  power  and  standing. 
Harrowing  as  were  the  disclosures,  knowledge  of  them  was  in- 
terred in  records  the  contents  of  which  never  reached  the  gen- 
eral public.  Although  constitutional  liberty  was  considerably  ex- 
tended during  the  reigns  of  the  early  Georges,  it  did  not  ensure 
freedom  of  the  press.  Parliament's  hostility  to  publication  of 
its  proceedings  had  long  been  inflexible  and  long  remained  so. 
If  editors  circuitously  managed  to  get  information  and  pub- 
lished it  even  in  the  most  guarded  and  innocuous  way,  they  were 
subject  to  arrest  and  penalizing. 


THE  LORDS  OF  TRADE  39 

The  Board  of  Trade,  on  the  contrary,  energetically  sought 
to  supply  the  fullest  information  on  existent  trade  and  to  point 
out  means  of  facilitating  its  greater  growth.  In  an  elaborate 
report,  in  1721,  on  the  "State  of  the  British  Colonies  in  North 
America,"  the  Board  of  Trade  had  gratified  British  business 
by  its  survey  of  prevailing  profitable  results  and  by  its  indica- 
tion of  prospective  opportunities.  The  colonies  dealt  with  were 
the  ten  then  formed  from  New  Hampshire  to  Carolina,  with 
Nova  Scotia  added.  Newfoundland  and  Hudson  Bay  were  not 
classed  as  colonies.  The  report  computed  that  Britain  exported 
annually  at  least  £1,000,000  sterling  in  British  and  other  goods 
to  American  colonies,  the  West  Indies  and  other  Atlantic 
Islands  and  to  Africa.  Of  this  total,  the  American  colonies  took 
fully  £500,000  a  year.  Glowingly  the  report  expatiated  upon 
"the  advantages  accruing  to  Great  Britain  from  so  large  an 
exportation  to  the  colonies  on  the  continent  of  America  from 
whence,  as  hath  been  shown,  there  doth  arise  a  balance  of 
£200,000."  Further,  the  report  pointed  out  in  congratulatory 
terms,  many  of  the  commodities  received  by  Britain  from 
America  were  such  that  otherwise  they  would  have  to  be 
bought  from  foreign  nations,  and  that  in  the  re-exportation 
from  Britain  of  tobacco,  sugars  and  other  goods  "there  is  a 
very  great  profit.'7 

The  triumphant  progress  of  Britain's  trade,  notably  with  the 
American  colonies,  was  vaunted  in  the  report.  The  three  years 
1714-1717  had  shown  an  aggregate  of  899  British  ships  clear- 
ing for  the  American  colonies ;  the  number  of  ships  engaged  in 
trade  with  Jamaica,  Bermuda  and  other  Atlantic  lands  brought 
the  total  to  2,014  ships  of  226,762  tons.  Employed  in  what  was 
called  the  "plantation"  trade,  this  fleet  was  more  than  a  sixth 
part  of  all  British  ships  sailing  from  English  ports  to  all  foreign 
countries,  and  it  was  even  "very  probable,"  the  report  noted, 
"that  the  trade  which  is  carried  on  between  England  and  the 
American  plantations  employs  at  least  one-fourth  part  of  the 
shipping  annually  cleared  from  this  kingdom."  Analyzing  fur- 
ther, the  report  took  account  of  the  number  of  ships  carrying 
American  colonial  goods  re-exported  from  Britain  to  Germany, 
Holland  and  other  countries;  "consequently,  it  may  be  con- 
cluded that  one-third  of  the  shipping  employed  in  the  foreign 


40  AMERICA  STRIKES  BACK 

trade  of  this  kingdom  is  maintained  by  the  plantation  trade."  ia 
Nothing  less  than  complete  monopoly  crushing  all  of 
America's  native  trade  satisfied  British  manufacturers  and 
merchants,  who  would  not  brook  the  slightest  infringement  of 
their  paramount  rights.  Parliament,  in  1699,  had  by  act  pro- 
hibited exportation  of  American  woolen  goods  to  any  place. 
Later  acts  forbade  manufacture  in  the  American  colonies  of  a 
variety  of  articles,  the  exclusive  trade  in  which  was  insisted 
upon  by  Britain.  Colonists  were  even  restrained  from  export- 
ing natural  resources.  The  Board  of  Trade  prohibited  exporta- 
tion of  timber  for  ships  to  foreign  countries.  When,  despite  this 
restriction,  New  England  merchants  shipped  timber  from  Mas- 
sachusetts and  New  Hampshire  to  Spain  and  Portugal,  Lord 
Bellomont  was  wrathful  at  the  openly-displayed  spirit  of  de- 
fiance. "These  people  laugh  at  your  Lordships'  order,  and  so 
they  would  at  an  order  from  the  King."  So,  on  January  2,  1701, 
he  notified  the  Board  of  Trade;  and  he  advocated  as  an  intimi- 
dating remedy  an  act  of  Parliament  to  make  colonial  participa- 
tion in  the  trade  a  penal  offence.13 

Authority,  as  embodied  in  the  Board  of  Trade,  was  thrown 
into  a  continuing  state  of  perturbation  by  the  refusal  of  Ameri- 
can colonists  to  heed  its  orders.  Likewise,  British  officials  in 
America  were  trying  desperately  to  find  some  way  of  subduing 
a  people  unawed  by  menace  of  law.  This  spirit,  Colonel  Robert 
Quary,  a  crown  official  in  America,  informed  the  Board  of 
Trade  on  June  16,  1703,  was  due  to  the  democratic  influence 
and  institutions  of  Massachusetts.  Abolish  colonial  local  gov- 
ernments, he  counseled,  and  put  all  colonies  under  command 
of  one  strongly  centralized  government.14 

In  England  kings  and  queens  and  partisan  administrations 
with  their  shifting  policies  came  and  went,  but  there  never  was 
any  deviation  in  the  Board  of  Trade's  assiduous  object  to  keep 
every  possible  particle  of  trade  in  British  hands.  Its  1721  re- 
port most  carefully  itemized  every  detail  of  each  American 
colony's  trade,  and  the  social  and  political  conditions  affecting 
such  trade.  That  Massachusetts  settlers  had  always  worked 
their  own  wool  into  cloths,  coarse  though  these  were;  that  those 
settlers  made  homespun  linen,  half  cotton  though  it  was;  and 
that  they  also  made  goods  from  leather,  were  matters  of  pro- 


THE  LORDS  OF  TRADE  41 

found  concern  to  the  watchful  Board  of  Trade.  Scanning  closely 
the  products,  and  also  judging  the  institutions,  of  other  Ameri- 
can colonies,  the  Board  of  Trade  vented  its  exasperation  in 
threatening  proposals.  It  denounced  American  colonies  for 
having  had  the  temerity  to  disobey  its  orders;  "they  have 
broken  through  the  laws  of  trade  and  navigation,  and  made 
laws  of  their  own  contrary  to  those  of  Great  Britain  .  .  .  and 
have  carried  on  a  trade  destructive  to  that  of  Great  Britain." 
Such  independent  temper,  the  Board  of  Trade  urged,  must 
be  suppressed  by  elimination  of  colonial  governments  all  too 
assertive  of  their  privileges,  and  by  the  subordination  of  all 
colonies  under  the  absolute  governing  power  of  a  single  Lieu- 
tenant- Governor . 1 5 

The  great  bulk  of  British  manufactures  exported  to  the 
American  colonies  consisted  of  woolen  goods  in  the  making  of 
which,  as  we  have  seen,  fraud  was  ineradicable.  The  remainder 
of  Britain's  exports  included  more  wares  in  the  manufacture 
of  which  fraud  was  often  notorious — linens,  sailcloth,  cordage, 
silk,  iron  products,  pewter  and  other  goods.  Colonial  exports  to 
Britain  were  mainly  furs  and  skins,  tobacco,  turpentine,  rice, 
sugar,  logwood,  train  oil  and  whale  fins. 

As  the  richest  of  all  traffic,  the  fur  trade  and  its  greater 
possibilities  constituted  a  subject  over  which  the  Board  of 
Trade  pondered  much.  It  was  in  this  trade  that  the  British  en- 
countered intense  competition  from  the  French.  With  its  in- 
fluential ramifications  in  Britain,  the  Hudson  Bay  Company 
did  not  have  to  fear  an  accounting  there  for  its  malefactions. 
Its  difficulties  lay  in  Canada  itself.  French  raiding  within  its 
territories  was  occasional.  But  claiming,  as  the  company  did, 
sovereignty  over  lands  far  from  its  chartered  bounds,  its  trad- 
ing agents  came  into  collision  with  French  traders  more  adept 
in  winning  the  favor  of  outlying  Indian  tribes.  And  by  either 
penetrating  into  Britain's  northern  American  colonies  or  in- 
ducing Indians  there  to  go  to  French  posts,  the  French  traders 
outwitted  many  of  the  British  in  the  capture  of  Indian  trade. 

This  French  success  was  imputed  by  British  officials  in 
America  and,  in  turn,  by  the  Board  of  Trade,  to  the  adroitness 
of  French  missionaries  in  making  their  propaganda  serve  the 


42  AMERICA  STRIKES  BACK 

double  purpose  of  advancing  religion  and  trade.  The  frequent 
and  severe  aspersions  upon  those  missionaries  were  but  the  re- 
flection of  the  bitterest  bigotry  then  prevailing  in  England  and 
in  most  of  its  American  colonies,  where  priests  were  outlawed 
and  Roman  Catholics  banned  and  disfranchised.  Following 
England's  lead,  nearly  all  the  colonies  had  enacted  laws  dis- 
abling Catholics  from  holding  public  office,  and  forbidding 
entry  to  priests.  Without  specifying  all  the  various  laws,  one 
of  a  number  enacted  in  New  York  shows  the  extremes  to  which 
the  virulence  of  passionate  bigotry  could  go.  By  a  New  York 
law  of  August  9,  1700,  all  priests  were  compelled  to  leave  New 
York  province  before  November  1;  any  thereafter  remaining 
and  preaching  his  faith  was  to  be  deemed  "an  incendiary  and 
a  disturber  of  the  public  peace  and  safety,"  and  was  liable 
to  suffer  perpetual  imprisonment.16 

The  Board  of  Trade  strongly  pressed  the  advisability  of 
extending  the  Indian  trade  "as  far  westward  as  lakes  and  rivers 
behind  the  mountains,"  doubtless  meaning  the  Alleghenies. 
British  traders  were  advised  to  emulate  the  tactics  of  the 
French.  These  had  furthered  their  interests,  the  Board  of 
Trade  set  forth,  by  encouraging  intermarriage  with  Indians; 
and  although  the  English  had  formerly  sought  to  propitiate 
Indian  chiefs  by  giving  presents,  this  ingratiating  practice  had 
been  discontinued  by  the  English  while  the  more  politic  French 
traders  had  adhered  to  it  as  a  regular  custom.  But  the  Board 
of  Trade's  recommendations  for  the  "cultivation  of  good  un- 
derstanding with  the  Indians"  were  not  as  essential  as  that  body 
thought.  Already  the  British  possessed  the  means  to  a  growing 
ascendency  in  the  fur  trade.  British  traders  resumed  giving 
presents  to  the  chiefs,  but  economic  advantages  conferred  a 
much  stronger  hold  than  gratuities  or  amicability. 

British  power  to  undersell  the  French  was  one  uppermost 
factor.  The  British  were  able  to  sell  cloth  cheaper,  and  by  turn- 
ing to  rum  they  could  supply  a  liquor  less  costly  than  the 
brandy  upon  which  the  French  had  wholly  to  depend.  The 
French  Government,  in  1708,  had  complained  to  its  function- 
aries in  Canada  that,  in  addition  to  higher  prices  paid  by  the 
English  for  beaver,  the  English  sold  merchandise  at  a  lower 


THE  LORDS  OF  TRADE  43 

rate  than  did  the  French.17  For  this  "unfortunate  state  of 
things,"  the  French  Government  demanded  a  remedy  which 
never  came  and  could  not  come.  The  goods  most  wanted  by 
Indians  were  made  in  England.  After  buying  them  there,  the 
French  had  to  have  them  conveyed  to  France,  from  whence 
they  were  shipped  to  Canada,  only  to  meet  more  transportation 
costs  and  difficulties  in  transit  via  the  St.  Lawrence  River.  The 
largest,  most  valuable  part  of  French  cargoes  to  Canada  for 
the  Indian  trade  consisted  of  duffels,  blankets  and  other  woolens 
which  were  bought  at  a  price  much  cheaper  in  England  than 
the  price  demanded  in  France.  And  strouds  (blankets  made 
of  a  coarse  warm  cloth) ,  prized  by  the  Indians  more  than  any 
other  article  of  clothing,  were  made  in  England  alone. 

These  facts  explanatory  of  the  situation  were  contained  in 
Cadwallader  Colden's  "Memorial  on  the  Fur  Trade"  sub- 
mitted on  November  10,  1724,  to  Governor  William  Burnett 
of  New  York.  Golden  described  the  predicament  of  the  French 
who,  desiring  rum  in  place  of  brandy  for  the  Indian  trade,  had 
no  commodities  in  Canada  which  could  be  exchanged  in  the 
West  Indies  markets  for  rum.  In  fact,  as  a  supplementary  and 
near  source,  the  British  set  up  a  rum  distillery  in  New  York. 
French  traders  were  left  with  no  alternative  but  that  of  using 
the  costly  brandy;18  and  in  1726  French  officials  in  Canada 
mournfully  acknowledged  the  effective  methods  of  the  British 
traders  in  "furnishing  them  [the  Indians]  goods  at  a  very  low 
rate,  and  supplying  them  with  rum,  which  is  their  [the  In- 
dians'] favorite  beverage."  19 

Not  until  nearly  forty  years  later  did  the  Board  of  Trade, 
impressed  by  the  horrors  of  the  French  and  Indian  War,  pro- 
hibit in  colonial  America  the  debauching  of  Indians  with  liquor. 
Whereupon,  it  is  curious  to  note,  a  remonstrance  signed  by 
many  of  New  York's  foremost  merchants — Henry  Bleecker, 
John  DePuyster,  Abraham  Schuyler  and  sundry  other  founders 
or  scions  of  rich  families — was  forwarded  in  1764  to  the  Board 
of  Trade.  They  lamented  the  considerable  decrease  of  trade 
already  resulting,  and,  with  a  high  air  of  considerateness  for 
the  Indians,  pronounced  the  order  a  violation  of  Indian  rights 
to  "liberty  of  trade."  Further  on  the  petition  avowed  with 


44  AMERICA  STRIKES  BACK 

brutal  candor  the  real  object  sought:  "Whereas,  when  the  vent 
of  liquor  is  allowed  among  them  it  spurs  them  to  an  unwearied 
application  in  hunting  in  order  to  supply  the  trading  places 
with  furs  and  skins  in  exchange  for  liquors."  20 


CHAPTER   V 
RAGING  SPECULATION 

THE  numerous  new  trading  areas  acquired  throughout  the 
world  by  England  in  the  seventeenth  century  had  opened  a 
dizzy  era  for  English  manufacturers  and  traders.  In  that 
century  Holland  was  Europe's  financial  and  commercial  center, 
and  from  stock  speculation  methods  at  Amsterdam  other  Euro- 
pean nations  learned  lessons.  In  England  company  after  com- 
pany was  formed,  and  upon  powers  conferred  by  Government 
and  the  roseate  visioning  of  enormous  profits,  extravagant 
quantities  of  stock  were  issued.  There  ensued  outbursts  of  spec- 
ulation to  the  obvious  excesses  of  which  no  official  attention 
was  given  until  after  an  acute  commercial  crisis  in  1696-1697. 

War  costs  and  stock  inflation  had  ushered  in  a  period  of 
disaster,  bringing  ruin  to  a  number  of  companies.  The  only 
public  opinion  which  then  had  power  to  make  itself  audible 
was  that  of  the  investing  class,  recruited  from  various  divisions 
of  the  propertied  class.  The  Board  of  Trade  gave  heed  to  the 
investors'  laments.  With  an  outspokenness  that  rarely  marked 
its  comments,  it  submitted,  in  1696,  a  scathing  arraignment, 
under  the  non-committal  title  of  "Report  on  the  Present  State 
of  Our  Trade."  This  report  deplored  "the  pernicious  art  of 
stockjobbing"  which  "hath  of  late  so  wholly  perverted  the  end 
and  design  of  companies  and  corporations  created  for  the  in- 
troducing or  carrying  on  of  manufactures  to  the  private  profit 
of  the  first  projectors."  What  use  had  these  made  of  their 
powers  and  grants?  Commonly,  the  report  stated,  no  other  than 
the  selling  of  their  stock  "to  ignorant  men,  drawn  in  by  the 
reputation,  falsely  raised  and  artfully  spread,  concerning  the 
thriving  state  of  their  stock." 

Hence  we  note  that  in  essentials  there  was  then  in  dextrous 
operation  the  decoying  contrivance  commonly  regarded  as  a 
concoction  of  the  financial  schemers  of  recent  times.  Substitute 

45 


46  AMERICA  STRIKES  BACK 

the  present  colloquialism  "unloading"  for  selling,  and  the  pic- 
ture of  seventeenth-century  frauds  upon  gullibles  becomes  still 
more  clarified.  And,  also,  the  species  of  predacious  promoters, 
now  usually  considered  an  outgrowth  of  modern  industrialism, 
were  then  in  successful  activity.  "Thus,"  the  report  went  on, 
referring  to  promoters,  "the  first  undertakers,  getting  quit  of 
their  company,  by  selling  shares  for  more  than  they  are  really 
worth,  to  men  allured  by  the  noise  of  great  profit,  the  manage- 
ment of  that  trade  and  stock  comes  to  fall  into  unskillful 
hands." 

Conventional  accounts  have  reverenced  that  time,  and 
slightly  later,  as  an  era  when  masters  of  industry,  giving  life 
service  to  it,  knew  its  processes  thoroughly  and  adhered  to  it 
with  unshaken  fidelity.  That  Board  of  Trade  report,  however, 
presented  verities.  It  set  forth  the  calamitous  as  well  as  the 
scandalous  "effects  of  this  stock-jobbing  management"  in  caus- 
ing companies  starting  "from  very  promising  beginnings  to 
dwindle  away  to  nothing."  They  had  fallen  into  "a  worse  con- 
dition than  if  they  were  left  perfectly  free  and  unassisted  by 
such  laws  and  patents."  The  distressing  state  of  the  paper  and 
linen  manufacturers  was  one  example  given.  Another  was  that 
of  the  fisheries;  even  in  this  line  stock- juggling  companies  were 
numerous.  The  affairs  of  fisheries  would  not  be  bettered,  the 
report  declared,  until  there  was  formed  a  responsible  company 
so  properly  conducted  "as  may  secure  the  management  of  it 
from  the  destructive  shuffling  of  stockjobbing."  x 

Although  at  this  time  there  was  not  any  regularly  constituted 
Stock  Exchange  at  London,  transactions  were  carried  on  by 
brokers  congregating  in  a  space  in  the  Royal  Exchange.  Their 
shady  dealings  caused  antagonism,  and  their  growing  numbers 
became  a  nuisance.  Ejected,  they  made  their  headquarters  in 
a  thoroughfare  called  Exchange  Alley  and  in  adjoining  coffee- 
houses. 

Acting  upon  a  charge  in  the  Board  of  Trade  report  that 
brokers  "confederated  themselves  to  raise  the  price  of  stocks," 
Parliament,  in  1697,  set  out  to  regulate  their  activities.  The 
preamble  of  a  law  then  passed  sketched  the  existing  condition 
of  market  manipulation  of  bank,  industrial  and  other  shares; 
various  stockbrokers  "do  unlawfully  combine  to  raise  and  fall 


RAGING  SPECULATION  47 

the  value  of  such  securities  for  their  own  advantage."  Applying 
for  three  years,  this  law  excluded  from  the  brokerage  business 
anyone  not  licensed  by  the  London  city  authorities,  and  re- 
stricted the  number  of  brokers  to  an  even  hundred.  No  broker 
could  charge  more  than  10  per  cent,  and  for  violation  of  the 
law  there  were  heavy  penalties.2  Renewed  for  another  seven 
years,  the  law,  at  the  end  of  that  time,  was  permitted  to  lapse, 
with  Parliament  uninfluenced  by  agitation  for  its  re-enactment. 
In  1708,  however,  Parliament  decided  that  by  a  law  putting  a 
40  per  cent  tax  on  stockbrokers  it  had  taken  adequate  means 
to  compel  them  to  disgorge  fat  profits.3  But  a  few  years  later 
the  brokerage  tax  was  reduced  to  a  slight  amount,4  whereupon 
stockbrokers  waxed  in  profits  and  saw  no  barrier  to  their 
frauds,  since  they  could  easily  recoup  the  amount  of  any  fines 
they  might  incur. 

In  1710,  after  a  financial  panic  caused  by  speculation  in  the 
stocks  of  dubious  insurance  companies,  the  public  treasury  was 
exhausted.  The  Premier,  Robert  Harley,  Earl  of  Oxford,  man- 
aged to  get  £3,000,000  for  it  by  two  public  lotteries,  but  this 
sum  was  wholly  insufficient  to  fill  the  gap.  Premier  Harley  now 
devised  a  scheme  intended  to  serve  the  double  purpose  of  pro- 
viding the  Government  with  money  to  pay  its  debts  and  of 
establishing  British  commerce  in  desired  regions. 

Virtually  of  Government  inception,  the  South  Sea  Company 
— formally  called  the  "Company  of  Merchants  of  Great 
Britain  Trading  to  the  South  Seas" — was,  however,  chartered 
in  September,  1711,  as  a  private  company.  The  nature  of  this 
enterprise  was  regarded  as  affording  an  ingenious  means  to 
British  trade  for  the  penetration  of  all  of  Spain's  American 
ports,  and  as  giving  no  opportunity  to  continental  European 
trading  nations  to  complain  of  overt  British  aggression.  The 
company's  bankers  were  mainly  rich  merchants,  confident  that 
the  prospects  of  huge  profits  from  trade  and  from  the  gold  and 
silver  mines  would  magnetize  the  small  investor. 

The  program  of  this  company  was  practically  the  first  in 
which  any  direct  and  systematic  effort  was  made  to  draw  in 
petty  investors;  heretofore  they  had  been  ignored  and  scorned. 
The  appeal  to  them  was  colored  with  fervent  patriotism.  It 


48  AMERICA  STRIKES  BACK 

represented  the  company  as  coming  to  the  rescue  of  the  empty 
public  treasury,  and  was  deemed  all  the  more  persuasive  on 
that  account. 

Of  the  real  and  full  career  of  the  memorable  South  Sea 
Company  there  has  been  no  adequate  historical  account.  Frag- 
mentary sketches  and  outlines  are,  perhaps,  familiar,  but  they 
are  meager,  inaccurate  and  omit  many  vital  facts.  They  have 
mainly  depended  for  their  information  upon  biographies  and 
other  books  written  after  the  event.  But  it  is  only  by  patient 
excavation  and  consultation  of  official  and  other  public  records 
of  the  time  itself  that  the  correct  and  complete  story  is  ob- 
tainable. 

Its  charter  granted  to  the  South  Sea  Company  exclusive 
trading  rights,  with  certain  exceptions,  to  the  East  Coast  of 
South  America  throughout  its  entire  length,  and  a  monopoly 
of  trading  in  the  Pacific  Ocean,  including  the  whole  American 
coast.  If  any  British  interloping  ships  presumed  to  engage  in 
commerce  in  its  domain,  the  company  was  empowered  to  seize 
them  by  force  and  confiscate  them.  The  company  was  granted 
further  arbitrary  powers  in  the  right  to  make  its  own  laws 
wherever  it  traded,  and  to  judge  and  punish  employes  and 
others  by  fines  and  imprisonment.  It  was  declared  the  sole 
owner  of  all  islands  that  it  might  discover.  Its  stock  (which  in 
a  few  years  was  expanded  almost  to  £40,000,000)  was  exempted 
from  all  taxes. 

In  return  for  these  rights,  estimated  as  having  a  great  present 
and  colossal  future  value,  the  company  agreed  to  take  over 
nearly  £10,000,000  of  the  national  debt.  On  this  they  were  to 
receive  6  per  cent  interest,  or  £600,000  a  year,  and  an  allow- 
ance of  £8,000  for  expenses  of  arranging  the  transaction. 
Britain's  public  debt  consisted  of  various  kinds  of  securities 
and  notes.  In  exchange  for  money  loaned  to  it  the  Govern- 
ment issued  what  were  called  annuities,  giving  the  lenders  fixed 
incomes  for  life  or  assured  for  a  specific  period.  There  were 
also  Treasurers'  orders  or  Exchequer  tallies,  representing 
money  loaned  to  the  public  treasury,  for  payment  of  which 
the  Government  was  responsible.  By  the  terms  of  the  charter 
the  company  was  given  three  further  hugely  valuable  rights. 
All  Government  debentures  taken  over  by  it  were  to  be  deemed 


RAGING  SPECULATION  49 

and  passed  as  public  money;  they  were  to  be  made  part  of  the 
company's  capital  stock;  and  the  company  could  demand  an- 
nuities for  the  debentures  that  it  took  over.  Another  of  the 
charter's  provisions  allowed  the  company's  members  to  be  mem- 
bers of  Parliament.5 

The  South  Sea  Company's  plan  seemed  so  plausible  and  so 
advantageous  to  debt  holders  that,  within  three  months  after 
the  granting  of  the  charter,  possessors  of  more  than  £9,000,000 
of  Government  debts  had  assented  to  the  company's  arrange- 
ment. Headed  by  the  Earl  of  Sunder  land,  who  was  at  the  same 
time  Britain's  Premier,  the  company  now  reached  out  for 
greater  spoils.  Britain's  entire  debt  was  £30,000,000.  In  1719 
the  directors  came  forward  with  a  plan  to  take  over  the  full 
national  debt,  offering  the  Government  £3,500,000  for  the 
privilege.  The  offer  was  hailed  as  a  great  proof  of  their  public 
benefaction,  in  that  they  were  relieving  investors  of  debt  hold- 
ings which  the  Government  had  no  funds  to  pay,  and  were 
giving  in  exchange  South  Sea  stock  which  already  had  a  sub- 
stantial market  value  and  promised  much  larger  accretions. 
However,  underneath  the  fair  appearance  of  the  company's 
ostensible  intent  and  benevolent  pose  was  the  covert  aim  of 
ensnaring  annuity  holders.  By  issuing  for  the  occasion  a  com- 
paratively small  amount  of  South  Sea  Company  stock  at  a 
high  premium,  the  company,  by  the  terms  of  the  bargain, 
would  receive  a  large  amount  of  annuities  which  could  then  be 
retired.  In  addition  to  the  company's  great  profits  from  this 
transaction,  the  Government  would  pay  it  a  large  sum  in  in- 
terest and  charges. 

But  the  South  Sea  Company  now  encountered  two  powerful 
antagonists  in  the  Bank  of  England  and  the  East  India  Com- 
pany. Beginning  a  quarter  of  a  century  previously  without  a 
pound  of  cash  capital,  the  Bank  of  England  had  become  emi- 
nently rich  by  grace  of  Government  favors  and  funds  and  by 
exemption  from  taxation  on  its  capital  stock.  It  naturally  ob- 
jected to  a  scheme  threatening  to  give  the  South  Sea  Company 
a  monopoly,  or  almost  so,  of  Britain's  money  supply  and  bank- 
ing business.  And,  although  the  South  Sea  Company's  charter, 
with  a  view  to  safeguarding  the  East  India  Company's  interests, 
expressly  prohibited  trading  in  East  Indian  goods,  the  East 


50  AMERICA  STRIKES  BACK 

India  Company  was  alarmed  at  the  rise  of  a  new  company 
which  might  seriously  trench  upon  its  power. 

The  Bank  of  England  offered  the  Government  £5,000,000 
for  the  same  privileges  requested  by  the  South  Sea  Company, 
which  now  in  turn  raised  its  bid.  As  the  sequel  showed,  sev- 
eral of  the  Cabinet  ministers  were  heavily  bribed,  and  the  South 
Sea  Company's  offer  was  accepted.  But  it  was  necessary  to  ob- 
tain an  enabling  act  from  Parliament,  in  both  houses  of  which 
were  beneficiaries  or  supporters  of  the  Bank  of  England  and 
the  East  India  Company.  The  passage  of  the  desired  act,  in 
April,  1720,  was,  as  also  shown  by  the  sequel,  secured  by  a 
general  bribery  of  members.  Connivance  of  the  king's  German 
mistresses  was  gained  by  presenting  them  with  a  share  of  the 
corruption  fund. 


CHAPTER  VI 
MONEY  MANIA  IN  FRANCE  AND  ENGLAND 

MEANWHILE,  there  was  growing  in  France  a  great  gambling 
mania  which,  through  the  medium  of  the  South  Sea  Company, 
soon  spread  its  infection  to  England. 

France  was  loaded  with  a  public  debt  amounting  to  2,000,- 
000,000  livres,  on  which  sum  its  Government  had  been  unable 
to  pay  interest.  The  Duke  of  Orleans,  then  Regent  of  France, 
and  his  advisers  were  completely  nonplussed  as  to  how  or 
where  to  raise  money,  when  there  came  to  Paris  a  man  with  a 
scheme.  This  welcome  individual  was  John  Law.  The  son  of 
a  goldsmith  and  banker,  Law  had  been  born  in  Edinburgh  in 
1671.  When  twenty-three  years  old  he  was  condemned  to  death 
for  killing  his  opponent  in  a  duel  in  London,  but  escaped  to  the 
continent  where  for  years  he  led  a  roving  life,  partly  in  gam- 
bling and  partly  in  trying  to  enlist  various  governments  in  the 
adoption  of  his  theories  and  financial  ideas. 

When  still  callow  Law  had  written  a  book  on  money  and 
trade;  and  to  the  ideas  he  there  maintained  he  clung  with  un- 
swerving fanaticism,  advocating  them  forcefully  on  every  pos- 
sible occasion.  His  theory  was  that  the  value  of  money  was 
based  wholly  upon  public  confidence.  Since  in  his  opinion  this 
was  so,  he  argued  that  paper  or  any  other  token  would  serve 
the  purpose  as  well  as  gold:  both  paper  and  gold  alike  repre- 
sented nothing  more  than  signs  or  evidences  of  wealth.  Better 
than  silver  as  a  basis  for  money,  Law  declared,  was  land;  and 
with  this  stable  foundation  the  currency  of  a  country  could 
properly  be  expanded  to  the  whole  value  of  its  lands.  His  con- 
tention was  that  such  an  increase  of  currency  would  not  cause 
depreciation  of  that  currency  but  would  bring  a  lowering  of 
interest,  thus  stimulating  trade  and  augmenting  wealth. 

Under  the  auspices  of  the  Duke  of  Orleans,  Law  with  asso- 
ciates established  the  Banque  Generate,  with  a  capital  of  6,000,- 

51 


52  AMERICA  STRIKES  BACK 

000  livres,  divided  into  1,200  shares  of  1,000  crowns  each.  The 
notes  of  Law's  bank  commanded  a  premium  over  specie  and 
were  accepted  in  payment  of  taxes.  To  this  early  success  of  the 
Banque  Generale  two  factors  mainly  contributed.  First,  the 
Government  had  repeated  an  old  artifice  of  manipulation:  it 
had  called  in  and  restamped  its  gold  currency,  issuing  as  worth 
twenty  livres  coins  for  which,  when  paid  back  to  it,  it  had  given 
only  sixteen  livres.  By  paying  a  higher  price  for  these  coins  than 
did  the  Government,  Law's  bank  naturally  received  money  for 
its  notes.  The  other  factor  was  the  Government  practice  of 
altering  at  its  will  the  value  of  the  marc  of  silver  in  proportion 
to  the  livre  which  was  the  coin  commonly  used.  These  frequent 
changes  gave  an  element  of  uncertainty  to  contract  settlements. 
Law  judiciously  made  his  bank's  notes  payable  in  livres  of  the 
same  weight  and  fineness  as  those  of  the  coin  currently  passed 
at  the  date  of  the  note.  Added  to  these  factors  was  the  con- 
venience of  carrying  paper  money,  which  met  with  wide  popular 
favor. 

With  prestige  acquired  and  public  confidence  gained,  Law  set 
out  on  a  more  ambitious  scheme.  Considerably  before  this  time 
a  company  had  been  incorporated  for  trading  purposes  to 
Louisiana  and  Canada,  but  it  was  regarded  as  having  forfeited 
its  rights.  In  1717  these  rights  were  transferred  to  Law  for 
the  foundation  of  a  new  company  which  was  organized  as  the 
Company  of  the  West  or  Mississippi  Company.  The  plan  con- 
templated was  that  of  paying  the  national  debt,  then  rated 
at  about  30  per  cent  of  its  nominal  value,  by  the  united  opera- 
tions of  the  company  and  the  bank. 

Asserting  that  prospects  of  vast  profits  fully  justified  the 
course,  the  Mississippi  Company  issued  100,000,000  livres  of 
stock,  in  units  of  500  livre  shares,  payable  for  a  part  of  the 
public  debt.  On  this  issue  of  stock  the  Government  paid  the 
company  4  per  cent  interest,  which  enabled  the  company  to 
declare  a  dividend  for  the  same  amount  on  its  capital.  With 
this  value  injected  into  the  stock  the  market  price  of  shares 
rose  from  160  to  500  livres.  Paying  off  the  original  stockhold- 
ers, the  Regent,  in  1718,  converted  the  Banque  Generale  into 
a  royal  bank,  and  in  the  following  year  the  French  East  India 
Company  was  amalgamated  with  the  Mississippi  Company. 


MONEY  MANIA  IN  FRANCE  AND  ENGLAND   53 

To  give  appearance  of  reality  to  the  company's  trading  opera- 
tions a  few  ships  were  bought,  and,  in  the  redoubled  propaganda 
put  forth,  the  number  was  magnified. 

The  next  move  was  the  company's  contracting  with  the  Gov- 
ernment to  farm  all  of  the  public  revenues.  (Farming  long 
remained  a  European  and  longer  still  an  Asiatic  customary 
practice,  whereby  rulers  empowered  individuals  to  collect  taxes 
and  other  dues.  The  revenue  farmers  paid  the  Government  a 
certain  percentage  of  the  amount  collected,  or  fixed  sums,  and 
retained  the  surplus  of  their  collections.)  As  a  condition  of  ob- 
taining this  farming  contract,  the  Mississippi  Company  agreed 
to  lend  the  Government  1,600,000,000  livres  at  3  per  cent,  and 
the  company  assured  the  public  that  it  was  now  able  to  pay  the 
splendid  dividend  of  200  livres  a  share.  The  market  price  of 
stock  at  once  rose  to  5,000  livres  a  share.  At  the  same  time 
the  bank  was  industriously  operating  the  printing  presses, 
manufacturing  bank  notes  which,  by  October,  1719,  reached 
the  gigantic  total  of  2,696,400,000  livres.  Simultaneously  more 
shares  were  created.  The  new  stock  was  bought  by  the  Regent 
with  the  notes  of  his  bank,  and  then,  by  borrowing  the  com- 
pany's same  notes,  he  paid  the  public  debt.  This  accomplished, 
the  bank  and  the  Mississippi  Company  were,  in  February, 
1720,  reunited. 

Looking  on,  the  public  had  seen  men  make  immense  fortunes 
from  the  rise  in  the  price  of  stock  from  170  to  5,000  livres  in  a 
single  year.  Now  came  a  general  frenzy  for  quick  riches  from 
speculation  and  stockjobbing.  The  company's  propaganda — 
or,  at  any  rate,  eulogies  of  its  marvelous  success  and  prospects 
— were  not  confined  to  France.  They  were  spread  broadcast  in 
many  European  capitals.  One  of  a  number  of  pamphlets,  in- 
tended chiefly  for  British  consumption  but  printed  in  both 
French  and  English,  told  how  ain  Paris  money  grew  so  common 
that  people  did  not  know  where  to  put  it  out  at  3  per  cent." 
The  pamphlet  further  represented  that  the  business  of  Parisian 
tradesmen  had  wonderfully  improved  and  workingmen's  wages 
had  increased.  "Many  noblemen,"  the  pamphlet  further  re- 
lated, "repaired  their  broken  fortunes;  and  others  grew  very 
rich.  .  .  .  Numbers  of  people,  never  known  in  the  world,  and 
sprung  from  nothing,  were  all  of  a  sudden  seen  riding  in  their 


54  AMERICA  STRIKES  BACK 

coaches,  only  by  striking  into  this  trade,  by  which  in  a  very 
few  months  they  gained  vast  sums."  An  appendix  to  the  pam- 
phlet gave  a  description  of  Louisiana,  asserting  that  French 
settlers  did  not  doubt  the  existence  of  gold  and  silver  mines 
there;  that  the  Indians  had  shown  them  some  of  the  ore.1 

Daniel  Defoe  in  England  could  see  nothing  wrong  in  the 
South  Sea  Company's  scheme  (he  himself,  it  was  said,  had 
suggested  it  to  Premier  Harley)  but  he  wrote  a  pamphlet  de- 
nouncing the  Mississippi  Company  scheme.  It  unavoidably 
would  "blow  up/'  he  declared.  "The  people  of  France  are  made 
the  instruments  of  putting  a  cheat  upon  themselves."  He  ex- 
plained the  speculative  mania  as  caused  by  "the  volatile  temper 
of  the  French  whose  levity  only  can  account  for  what  we  are 
now  to  take  notice  of,  and  the  warmth  of  the  French  temper 
must  indeed  be  answerable  for  the  running  up  of  an  imaginary 
stock."  It  was  this  temper,  in  his  view,  "which  prompts  them 
to  push  things  to  an  extremity,"  and  the  mounting  stock  prices 
were  caused  by  the  "fluttering,  rash  disposition  of  the  people 
of  France."  Of  the  Mississippi  Company  scheme  he  predicted: 
"Great  will  be  the  fall  of  it." 

To  Defoe's  warning  no  credit  was  given,  but  his  descriptions 
of  the  Paris  speculation  rage  and  its  results  only  the  more 
inflamed  cupidity  in  England  itself.  When  Defoe's  pamphlet 
was  penned  Mississippi  Company  stock  had  gone  up  to  2,050 
livres.  "So  eager,"  he  wrote  of  scenes  in  Paris,  "were  the  people 
to  throng  in  their  money  into  the  stock  that  they  were  ready  to 
tread  one  another  to  death  to  get  to  the  books,  and  it  was  the 
greatest  favor  in  the  world  to  be  admitted.  .  .  ."  2 

Speculative  fever  now  broke  forth  in  Britain.  As  Law's  Mis- 
sissippi Company,  once  it  sensed  public  ripeness  for  specula- 
tion, had  quickly  responded  by  putting  out  more  and  more 
stock,  so  now  the  directors  of  the  South  Sea  Company  and  many 
other  British  promoters  hastened  to  take  advantage  of  a  British 
public  ready  to  be  deluded.  And  as  Law  had  shown  the  way 
to  elevating  himself  in  public  estimation  into  a  financial  hero 
and  a  producer  of  national  prosperity,  so  the  South  Sea  Com- 
pany's directors  instigated  impressive  praise  of  their  acumen, 
probity  and  patriotism.  "They  were  esteemed,"  wrote  a  pam- 


MONEY  MANIA  IN  FRANCE  AND  ENGLAND   55 

phleteer,  "too  wise  to  be  deceived  themselves  and  too  honest 
to  deceive  their  friends.  Thus  qualified  for  mischief  they  soon 
began  it."  3 

When  South  Sea  stock  rose  100  per  cent  in  a  single  day,  the 
same  pamphleteer  wrote  of  the  feeling  in  Britain,  "a  man  of 
moderate  fortune  now  seemed  poor  by  all  the  riches  about  him 
so  suddenly  acquired.  .  .  .  The  merchant  who,  through  a  long 
diligence  and  a  great  variety  of  hazard  had  gained  a  small  es- 
tate, grew  mad  to  see  so  many  idle  fellows  enrich  themselves  in 
a  day  or  two.  The  honest  country  gentleman  who,  by  good  man- 
agement and  wise  economy,  had  been  an  age  in  paying  off  a 
mortgage,  or  saving  a  few  small  portions  for  his  younger  chil- 
dren, could  not  bear  the  big  discourse  and  insults  of  this  new 
race.  Both  laid  aside  their  prudence,  and  at  last  became  un- 
happy converts  to  South  Sea.  .  .  .  The  one  despised  his  trade 
and  sold  his  effects  at  any  rate  [price]  to  try  his  fortune, 
the  other  mortgaged  what  he  could,  or  sold  it  for  a  little 
stock.  .  .  ."4 

Himself  a  speculator  in  South  Sea  stock,  riches  from  which 
placed  him  for  a  time  on  the  pinnacle  of  wealth,  Dr.  James 
Houstoun  left  in  his  "Memoirs"  one  of  the  best  contemporary 
accounts.  Of  the  uproar  in  Exchange  Alley  stock  buying  he 
wrote:  "From  the  first  quality  [of  rank]  to  the  meanest  trades- 
man, bustling  and  jostling  together,  and  dealing  for  thousands 
of  pounds  in  a  minute;  credit  was  so  extensive  that  it  was  in 
the  hands  of  everybody;  they  only  wanted  your  name  for  it. 
.  .  .  All  were  brothers  in  prosperity.  .  .  .  For  during  the 
violence  of  this  raging  distemper,  the  daily  transactions  in  and 
about  'Change  Alley  amounted  to  a  greater  sum  than  the  whole 
circulating  cash  of  Great  Britain  amassed  together."  5 

So  speedily  did  the  price  of  South  Sea  Company  stock  go  up 
that  many  eager  men  of  insufficient  resources  came  in  the  mar- 
ket too  late.  But,  they  were  assured,  the  South  Sea  Company's 
directors  were  men  of  public  spirit  and  desirous  of  helping 
everybody.  The  price  of  South  Sea  stock,  these  late  comers 
were  further  assured,  would  unfailingly  reach  £1,500;  "they 
were  advised  to  enlarge  their  capital  and  their  success  ...  in 
proportion  would  be  much  greater.  Thus  deluded  into  enlarg- 
ing their  capital  they  borrowed  on  the  stock."  6 


56  AMERICA  STRIKES  BACK 

Within  a  year  the  market  price  of  the  South  Sea  Company 
stock  rose  to  £1,050  a  share;  Dr.  Houstoun  affirmed  that  it 
went  as  high  as  £1,300.  Seeing  such  opportunities  to  gull  the 
public,  promoters  of  scores  of  other  bubble  schemes  introduced 
and  manipulated  their  stocks. 

As  the  Mississippi  Company  speculation  in  France  had  given 
furious  impetus  to  South  Sea  Company  and  other  speculation 
in  Britain,  so  now  the  gathering  troubles  besetting  the  Missis- 
sippi Company  presently  had  a  cooling  effect  in  Britain.  The 
rise  of  Mississippi  Company  stock  to  10,000  livres  a  share  did 
not  and  could  not  last  long.  During  the  time  when  the  price 
ranged  between  5,000  and  10,000  livres,  many  of  the  original 
holders  or  "insiders"  sold  their  stock,  flooding  the  market  with 
shares,  lowering  prices,  and  interfering  with  the  Government's 
sales  of  its  Mississippi  stock.  The  stupendous  output  of  paper 
money  caused  its  depreciation  and  drove  gold  and  silver  from 
France.  Various  expedients  devised  by  the  Government  and 
the  bank  to  retain  these  within  that  country  were  futile.  By 
May,  1720,  France's  paper  money  circulation,  amounting  to 
the  colossal  sum  of  2,235,000,000  livres,  could  not  be  sustained. 
Whereupon  a  royal  edict  ordered  that  its  value  be  reduced  one- 
half  by  immediate  monthly  reductions.  This  measure  brought 
the  French  people  face  to  face  with  realities;  its  instant  effect 
was  to  make  them  refuse  to  accept  bank  notes,  which  were  no 
longer  seen  in  circulation.  The  significance  of  these  moves,  in- 
volving technical  matters  of  finance,  were  not  generally  under- 
stood in  Britain.  For  Law's  bank  and  his  Mississippi  Company 
still  functioned,  and  there  had  been  no  official  extinction  of  the 
bank  notes. 

It  was  not  until  October,  1720,  that  the  British  public  had  a 
clear  idea  of  what  a  catastrophe  had  come  to  France.  But  by 
early  summer  of  1720  some  London  financiers  saw  the  situation 
clearly  enough.  And  so  great  was  the  number  of  flimsy,  illegal 
or  fraudulent  stockjobbing  companies  in  Britain  and  so  vast 
their  stock  issues,  that  alarm  was  manifested  in  high  places. 

The  Lords  Justices,  on  July  12,  1720,  set  out  to  put  a  stop 
to  "those  pernicious  practices."  The  resolutions  of  those  judges 
were  confined  to  the  operations  of  scores  of  mushroom  com- 


MONEY  MANIA  IN  FRANCE  AND  ENGLAND    57 

panics  which  were  stigmatized  as  "bubbles."  A  long  list  was 
given.  The  Lords  Justices  declared  that  "the  sums  intended  to 
be  raised  by  these  airy  projects  amounts  to  a  little  less  than 
£300,000,000,  a  sum  so  immense  that  it  exceeds  the  value  of 
all  the  lands  in  England."  7  In  particular,  writs  were  issued 
against  various  illegal  concerns,  among  which  were  the  Eng- 
lish Copper  Company  and  the  Welsh  Lead  and  Copper  Com- 
pany. The  Prince  of  Wales,  later  George  II,  was  the  head, 
then  called  governor,  of  the  English  Copper  Company.  When 
formally  notified  that  the  company  had  no  legal  standing  he 
asked  the  directors  to  choose  another  Governor.8  Before  he 
withdrew,  it  is  chronicled,  he  pocketed  £40,000.9 

Some  perceptive  individuals  who  saw  the  explosive  effects  of 
the  situation  both  in  France  and  at  home  were  selling  South 
Sea  Company  stock  in  June  and  July,  1720.  By  August  17  the 
price  had  fallen  to  £830.  The  tricks  to  which  the  South  Sea 
Company's  directors  now  resorted  were  fully  detailed  in  the 
Parliamentary  records.  To  force  up  the  price  they  immediately 
sent  agents  into  Exchange  Alley  to  buy  up  a  considerable 
quantity  of  stock,  the  price  of  which  thereupon  rose  to  £880. 
Two  days  later  it  had  fallen  to  £820. 

Notwithstanding  successive  declines  in  price  the  spell  of 
South  Sea  stock  upon  the  public  was  unbroken.  Crowds  still 
surged  in  the  company's  offices  which,  although  they  had  been 
enlarged,  could  not  accommodate  the  swarms  eager  to  ex- 
change annuities  for  stock.  For  transaction  of  business  it  had 
been  found  necessary  to  put  tables  and  desks  in  the  streets. 
Careless  of  what  the  market  price  was  and  believing  the  price 
would  rebound,  crowds  continued  to  do  business  directly  with 
the  company.  "And  the  directors  observing  that  great  quantities 
of  stock  had  been  bought  [on  August  17  and  18]  at  £1,000 
and  even  at  higher  prices"  decided  to  close  the  transfer  books, 
and  five  days  later  open  other  books  for  the  selling  of  £1,000,- 
000  of  capital  stock,  at  the  rate  of  £1,000  for  every  £100  share. 
This  sum  was  to  be  paid  in  money,  20  per  cent  down,  the  re- 
mainder in  installments.  When  subscriptions  were  opened  at 
South  Sea  House  on  August  24  "there  was  such  a  vast  crowd 
of  subscribers,  and  amongst  them  not  a  few  of  the  prime  nobil- 
ity, that  in  less  than  three  hours  more  the  intended  sum  was 


58  AMERICA  STRIKES  BACK 

subscribed;  and  that  very  afternoon  this  fourth  subscription 
was  sold  in  Exchange  Alley  at  30  or  40  per  cent  advance."  10 

This  was  but  a  flash.  Pressure  of  secret  selling  from  various 
of  the  company's  directors  and  officers  for  their  personal  ac- 
count sent  the  price  of  the  stock  down  in  two  days  to  £800, 
and  a  little  later  to  £700.  To  silence  outcries  of  hosts  of  annuity 
holders  who  had  bought  stock  at  much  higher  prices,  the  com- 
pany's directors  now  executed  a  bold  stroke.  Although,  as  in- 
vestigation later  showed,  the  South  Sea  Company  had  no  money 
to  pay  therefor,  the  directors  passed  a  resolution  "that  30  per 
cent  in  money  should  be  the  half  year's  dividend,  due  at  Christ- 
mas next,  and  that  from  thence  for  twelve  years  further,  not 
less  than  50  per  cent  in  money  should  be  the  yearly  dividend 
on  their  stock."  n  At  first,  this  declaration  raised  the  price  of 
stock  to  £800,  yet  it  soon  sagged,  and  kept  on  declining. 

To  appease  a  growing  number  of  stockholders  looking  with 
dismay  upon  dubious  shares  for  which  sounder  annuities  had 
been  exchanged,  the  South  Sea  Company's  directors  now  staged 
a  move  for  public  effect. 

A  general  meeting  of  the  company  was  called  for  and  held 
on  September  8,  1720,  and  precautions  were  taken  to  crowd  it 
with  upholders  of  the  company's  policies.  The  proceedings  be- 
gan with  a  laudatory  speech  by  James  Craggs,  secretary  of 
the  company,  who  fervidly  maintained  that  no  company  "had 
ever  performed  such  wonderful  things"  as  had  the  great  South 
Sea  Company.  It  had,  he  went  on,  accomplished  the  miracle  of 
reconciling  all  parties  in  one  common  interest  and  the  equal 
marvel  of  extinguishing  domestic  animosities.  With  bland  as- 
surance Craggs  ignored  the  falling  market  price  of  the  com- 
pany's stock  and  the  mounting  losses  confronting  legions  of 
stockholders.  He  warmly  described  how  "by  the  rise  of  its 
stocks  the  moneyed  men  had  vastly  increased  their  fortunes; 
the  country  gentlemen  had  seen  the  value  of  their  lands  treble 
in  their  hands;  and  they  [the  company]  had  at  the  same  time 
done  good  to  the  church,  not  a  few  of  the  reverend  clergy  got 
great  sums  from  this  project.  In  short  they  [the  company]  had 
enriched  the  whole  nation." 

To  the  surprise  of  the  company's  officials  who  believed  that 
they  had  the  meeting  completely  in  hand,  a  couple  of  persons 


MONEY  MANIA  IN  FRANCE  AND  ENGLAND   59 

ventured  "to  speak  in  favor  of  the  annuities,  and  [proposed] 
to  censure  the  directors,  but  they  were  presently  hissed  to 
silence."  Saying  that  he  knew  of  no  reason  why  anybody  should 
not  be  satisfied,  the  Duke  of  Portland  made  a  motion  for  a  vote 
of  thanks,  which  resolution  was  enthusiastically  adopted.12 

This  overwhelming  vote,  the  directors  expected,  would  cer- 
tainly have  a  soothing  effect  upon  the  public.  But  slight  as  was 
the  opposition  at  that  meeting,  the  suppressing  of  it  was  noised 
abroad  and  awakened  alarm  among  such  of  the  public  as  saw 
the  implications.  On  the  next  day  the  price  of  the  stock  fell  to 
£640,  making  a  sheer  drop  to  £550  on  the  day  following.  The 
directors  were  in  a  quandary.  They  had  used  great  sums  in 
manipulating  the  stock  market,  and  had  committed  the  com- 
pany to  payment  of  preposterous  dividends.  Above  all,  they 
needed  connection  with  a  source  of  large  cash  supply.  "Under 
the  influence  and  interposition  of  some  persons  of  the  highest 
figure  and  station,"  the  South  Sea  Company  directors  made 
overtures  to  the  East  India  Company  for  a  union  of  the  two 
corporations.  The  proposal  was  rejected.  Then  the  South  Sea 
Company  directors  approached  the  Bank  of  England  for  as- 
sistance. Only  conferences,  or  rather  talks,  were  held  on  the 
morning  of  September  12,  but  upon  the  strength  of  these,  the 
report  was  circulated  as  a  fact  that  an  agreement  had  been 
reached.  South  Sea  stock  thereupon  rose  to  £670;  in  a  few 
hours,  when  a  denial  was  issued,  the  price  fell  to  £580.  A  week 
later  it  was  £400.  Through  September  down  and  down  went 
the  market  price,  until  by  the  end  of  the  month  it  was  £150.13 

These  great  declines,  together  with  the  discrediting  of  the 
South  Sea  Company's  securities,  caused  a  furious  run  upon  the 
largest  goldsmiths  and  most  "eminent"  banking  houses.  Some 
of  these  had  loaned  great  sums  upon  South  Sea  Company  stock 
and  upon  that  of  other  corporations.  Goldsmiths  and  bankers 
precipitately  closed  their  places  and  hastened  to  abscond.  News 
of  this  spreading — and  the  news  traveled  fast — added  to  the 
general  consternation  and  anger.  Immediate  action  was  taken 
to  adjudge  bankrupt  the  missing  money  custodians.  Another 
threatening  crowd  made  a  fierce  run  upon  the  Sword-Blade 
Company,  the  banking  auxiliary  of  the  South  Sea  Company. 


CHAPTER   VII 
WHEN  BUBBLES  BURST 

WITH  the  loud  bursting  of  the  two  giant  bubbles  in  France  and 
England  a  multitude  of  lesser  bubbles  vanished.  In  October, 
1720,  Law's  bank  was  formally  suppressed  by  the  French  Gov- 
ernment, and  the  Mississippi  Company  became  a  nullity.  The 
accounts  of  this  combined  scheme  of  jobbery  and  fraud  were 
in  so  bewildering  a  state  that  the  unraveling  of  the  confusion 
took  a  long  time  and  arduous  application.  All  told,  the  bank 
had  issued  the  prodigious  quantity  of  2,696,000,000  livres  of 
bank  notes.  Of  these  700,000,000  were  found  in  the  bank;  the 
public  had  the  remainder.  Cash  in  the  bank,  amounting  to  90,- 
000,000  livres,  was  used  to  pay  off  an  equal  amount  in  bank 
notes.  For  part  of  the  balance  of  outstanding  notes  the  Gov- 
ernment paid  holders  at  the  rate  of  one-half  of  their  nominal 
value;  the  other  part  was  a  total  loss  to  holders.  Of  the  Missis- 
sippi Company's  200,424  shares  of  stock,  it  was  found,  the 
public  held  200,000  shares,  and  the  Regent  the  insignificant 
remainder.  The  loss  to  the  stockholders  was  estimated  at 
1,863,000,000  livres.1 

Numbers  of  people  were  plunged  from  the  heights  of  af- 
fluence or  from  the  comfortable  plane  of  easy  circumstances 
to  the  depths  of  poverty.  France,  dispirited,  was  resounding 
with  the  cries  of  woe  of  a  disillusioned,  embittered  population. 
Business  was  shattered  and  for  a  long  time  stagnant;  there 
was  a  dearth  of  any  medium  of  exchange.  The  deluge  of  paper 
money  had  forced  from  France  to  other  countries  an  amount 
of  coin  computed  at  500,000,000  livres.  In  all  of  the  channels 
of  trade  confidence  was  lacking,  and  nobody  trusted  the  Gov- 
ernment. As  much  reviled  now  as  formerly  he  had  been  ex- 
tolled, Law  was  driven  from  France,  and  his  estates  were  con- 
fiscated. He  returned  to  England  in  the  year  following  the  South 
Sea  Company's  collapse,  and  there  had  the  grim  satisfaction  of 

60 


WHEN  BUBBLES  BURST  61 

looking  on  at  the  baleful  consequences  of  another  monstrous 
bubble  which  no  one  could  charge  to  his  theories.  Four  years 
later  he  went  to  Italy,  and  died  in  Venice  in  1729. 

Of  the  total  losses  directly  and  indirectly  caused  in  Britain 
by  the  mass  of  fraud  and  stockjobbery  no  approximation  is 
obtainable.  In  Britain  there  was  no  accompanying  increase  of 
currency  such  as  saturated  France.  On  the  other  hand,  stock 
schemes  were  far  more  numerous  in  Britain,  and  losses  in  that 
regard  were  correspondingly  much  greater.  Conditions  there 
were  calamitous.  The  dislocation  of  trade  affected  all  classes; 
the  British  people,  or  at  least  the  sections  which  had  possessed 
or  could  borrow  money  for  stock  investment  or  gambling,  were 
"reduced  to  dejection  and  ruin."  Noble  families  of  ancient 
lineage  and  venerated  as  the  country's  honor — so  lamented  one 
pamphleteer — were  "brought  to  ruin  and  beggary,  and  their 
estates  [are]  in  the  possession  of  sharpers."  Numerous  worthy 
gentlemen,  tempted  by  extraordinary  promises  of  profit  to  sell 
their  estates  and  buy  South  Sea  Company  stock  "have  been 
stript  of  both  money  and  lands."  British  merchants  had  been 
"obliged  to  quit  their  habitations  and  be  vagrants  in  those  parts 
of  the  world  where  [whence]  they  had  formerly  imported 
treasure  to  these  kingdoms." 

Further,  "our  middle  sorts  of  persons  are  shutting  up  their 
shops;  our  artificers  and  poor  are  starving."  The  many  who 
had  borrowed  for  stock  purchases  were  now  pressed  by  credi- 
tors, who  seized  even  household  articles.  "Are  not,"  asked  one 
pamphleteer,  "their  misfortunes  great  enough  already  who  are 
thus  reduced,  who  from  plenty  now  scarce  have  bread?  Must 
the  last  poor  morsel  be  wrested?"  This  pamphleteer  commented 
upon  the  general  hardness  of  heart  in  this  bitter  adversity,  ev- 
ery man  thinking  of  his  own  skin.  Another  pamphleteer  de- 
clared: "  'Tis  owing  to  this  sin  of  avarice  we  may  justly  impute 
our  present  misfortunes."  2 

Impressed  by  the  money  craze  in  which  he  had  been  a  partici- 
pant, Dr.  Houstoun  wrote  in  ironic  vein:  "My  riches  and 
grandeur  did  not  last  above  seven  or  eight  months  before  I 
was  sunk  into  a  deeper  abyss  than  ever."  He  had  lost  every- 
thing and  was  £5,000  in  debt.  To  escape  his  creditors — thou- 
sands of  others  were  fleeing  likewise — he  had  to  go  abroad 


62  AMERICA  STRIKES  BACK 

where  he  obtained  the  post  of  physician  and  surgeon-general, 
first  to  the  Royal  African  Company,  then  to  the  South  Sea 
Company.  Every  time  he  even  set  foot  in  England  his  creditors 
hounded  him.  During  his  banishment  he  amused  himself  by 
writing  a  play  which  he  entitled  "Money,  the  Emperor  of  the 
World."  The  Emperor  sat  on  a  throne  of  great  magnificence, 
and  about  him  was  a  continual  flow  of  money  from  an  inex- 
haustible source.  "The  whole  world,"  Houstoun  wrote  describ- 
ing this  part  of  his  play,  "is  addressing  his  Imperial  Majesty 
by  turns;  kings,  courtiers,  divines,  lawyers,  physicians  and 
tradesmen.  At  a  distance  is  placed  a  great  multitude  of  the 
populace.  All,  from  the  knighte  to  the  cobbler,  harangue  this 
great  monarch  to  serve  their  different  views  and  designs  in  their 
own  way."  In  various  places  in  his  book  he  expressed  himself 
on  money's  power:  "In  short,  sir,  money  is  the  devil,  the  very 
devil  we  all  talk  of  and  most  worship."  "We  find  by  experience 
that  money  is  the  only  lawgiver  of  Europe."  3  Dr.  Houstoun 
also  cherished  the  consoling  reflection  that  there  were  great 
as  well  as  little  fools;  he  instanced  the  case  of  the  Duke  of 
Chandos,  who  lost  "an  immense  sum  of  money"  in  Royal  Afri- 
can Company  stock  speculation.4 

Members  of  both  houses  of  Parliament  were  in  a  bitter  mood; 
charges  were  made  and  recriminations  flung  with  irate  fre- 
quency. A  debate  in  the  House  of  Commons,  on  December  8, 
1720,  was  interspersed  by  the  repeated  use  of  the  word  crimi- 
nal; and  Lord  Molesworth  said  that  he  "looked  upon  the  con- 
trivers and  executors  of  the  villainous  South  Sea  schemes  as  the 
parricides  of  the  country,"  and  would  be  satisfied  to  see  them 
treated  in  the  ancient  Roman  way — that  is,  sewn  in  a  sack  and 
thrown  in  the  river.5  A  few  days  later  the  House  of  Commons 
assented  to  this  declaration:  "That  the  present  calamity  is 
mainly  owing  to  the  vile  arts  of  stockjobbers."  6  Both  houses 
of  Parliament  ordered  investigations.  Public  excitement  was 
intense;  and  there  had  been  a  minority  in  Parliament,  under 
the  leadership  of  Sir  Robert  Walpole,  which  all  along  had  op- 
posed the  South  Sea  scheme.  The  investigations  were,  accord- 
ingly, not  of  the  usual  leisurely  or  nominal  kind,  but  were 
pushed  with  great  rapidity. 

When  on  January  21,    1721,  it  was   found   that   Robert 


WHEN  BUBBLES  BURST  63 

Knight,  cashier  of  the  South  Sea  Company,  had  fled,  the  House 
of  Commons  at  once  ordered  a  strict  search  of  all  ports  and 
coasts;  later  he  was  arrested  at  Antwerp.  On  the  same  day 
General  Rosse  of  the  House  of  Commons  Committee  of  Secrecy, 
which  was  investigating,  informed  that  body:  "That  they  had 
already  discovered  a  train  of  the  deepest  villainy  and  fraud 
that  ever  contrived  to  ruin  a  nation."  7  Three  days  later  the 
House  of  Lords  passed  a  resolution  declaring  that  the  taking 
of  stock  by  any  member  of  Parliament  without  paying  for  it 
was  "a  notorious  and  dangerous  corruption."  8  The  standards 
of  the  times  are  well  shown  by  this  resolution.  Provided  a  mem- 
ber paid  for  stock,  his  voting  in  Parliament  on  measures  affect- 
ing the  company  in  which  he  held  stock  was  entirely  legitimate. 
This  standard  long  continued  that  of  the  British  Parliament. 

A  few  days  later  the  Select  Committee  of  the  House  of  Lords 
passed  a  resolution  stating  that  the  South  Sea  Company  di- 
rectors, on  pretence  of  keeping  up  the  price,  had  ordered  great 
quantities  of  stock  to  be  bought  for  the  company.  At  the  same 
time  several  of  the  directors  and  other  officers  of  the  company, 
"having  in  a  clandestine  manner  sold  their  own  stocks  to  the 
company,  such  directors  and  officers  are  thereby  guilty  of  a 
notorious  fraud  and  breach  of  trust."  9  On  February  2,  1721, 
both  houses  of  Parliament  adopted  resolutions  denouncing  as 
frauds  various  of  the  company's  transactions  and  artifices  to 
raise  the  price  of  stock.  The  promoting  of  the  third  issue  of 
stock  was  done  "to  cheat  the  public";  the  declaring  of  the  30 
and  50  per  cent  dividends,  when  the  company  had  no  money 
to  pay  them,  was  "a  villainous  artifice  to  delude  and  deceive" 
and  "a  notorious  fraud."  10 

The  Committee  of  Secrecy's  findings  showed  that  £70,000  of 
South  Sea  Company  stock  had  been  handed  to  John  Aislabie, 
Chancellor  and  Under-Treasurer  of  the  Exchequer.  This  trans- 
action was  denounced  as  "a  most  notorious,  dangerous  and 
infamous  corruption  in  the  said  Mr.  Aislabie"  who  had  "en- 
couraged and  promoted  the  dangerous  and  destructive  execu- 
tion of  the  late  South  Sea  scheme  with  a  view  to  his  own 
exorbitant  profit."  A  resolution  was  passed  to  expel  him  from 
the  House  of  Commons  and  commit  him  to  the  Tower. 11  The 
finding  further  showed  that  before  the  act  of  April,  1720,  was 


64  AMERICA  STRIKES  BACK 

passed  for  the  benefit  of  the  South  Sea  Company,  £50,000  of 
the  company's  stock  had  been  given  to  the  Earl  of  Sunder  land, 
a  member  of  the  House  of  Lords;  he,  be  it  recalled,  was  Prime 
Minister  and  First  Lord  of  the  Treasury.12  To  James  Craggs, 
Sr.,  Postmaster-General,  £40,000  of  the  stock  had  been  given. 
Craggs  died  soon  after  the  company's  collapse;  his  estate 
showed  that  he  left  £87,000  of  South  Sea  stock,  £34,000  of 
East  India  Company  stock,  and  £1,000  of  the  Bank  of  England 
stock;  and  the  committee  denounced  him  as  "a  notorious  ac- 
complice and  confederate  of  Robert  Knight." 13  The  Committee 
of  Secrecy  handed  in  seven  reports  in  quick  succession;  these 
showed  that  large  specified  amounts  of  stock  had  been  dis- 
tributed among  members  both  of  the  House  of  Lords  and  the 
House  of  Commons;  many  names  of  recipients  were  given.14 

The  estates  owned  by  the  directors  of  the  South  Sea  Com- 
pany amounted  to  a  total  of  more  than  £2,000,000.  When  Par- 
liament proceeded  to  confiscate  those  estates  two  of  the 
directors  implored  leniency,  upon  which  Mr.  Shippen  in  the 
House  of  Commons  said  that  "a  whole  injured  nation  called 
aloud  for  vengeance."  15  But  less  than  a  month  later  Parlia- 
ment did  modify  its  confiscatory  rigor  by  allowing  the  directors 
to  retain  about  one-sixth  of  their  estates.16  To  making  any 
allowance  to  Grigsby,  one  of  the  directors,  a  member  of  the 
House  of  Commons  objected:  "Since  that  upstart  was  so 
prodigally  vain  as  to  bid  his  coachman  feed  his  horses  with 
gold,  no  doubt  but  what  he  can  feed  on  it  himself.  I,  therefore, 
move  that  he  [Grigsby]  be  allowed  as  much  gold  as  he  can  eat, 
and  the  rest  of  his  estate  might  go  towards  the  relief  of  the 
sufferers."  A  motion  to  remit  to  Grigsby  £10,000  was  amended 
and  passed  to  allow  him  £2,000. 

The  company's  directors  had  loaned  £11,000,000  on  their 
own  stock;  among  the  numerous  borrowers  were  138  members 
of  Parliament.  In  the  case  of  bona  fide  buyers  of  the  stock 
Parliament  remitted  this  debt  to  the  company  upon  payment 
of  10  per  cent  of  sums  borrowed,  and  made  the  same  provision 
for  the  benefit  of  persons  who  had  borrowed  money  from  the 
company  upon  subscriptions.  And  of  the  £7,000,000  due  from 
the  company  to  the  Government,  £5,000,000  was  remitted  for 
the  relief  of  sufferers  from  the  South  Sea  scheme.17  A  number  of 


WHEN  BUBBLES  BURST  65 

the  personages  chiefly  implicated  opportunely  died  while  the 
investigation  was  in  progress,  and  various  others  escaped 
punishment. 

Astonishing  as  it  may  seem,  the  South  Sea  Company  man- 
aged to  extricate  itself  and  remain  solvent.  Its  capital  stock, 
still  remaining  at  nearly  £40,000,000,  was,  however,  subjected 
to  various  changes  in  the  course  of  years.  Its  monopoly  of 
trading  rights  remained  intact.  For  the  surrender  of  certain  of 
these,  interfering  with  Spanish  aims,  the  Spanish  government, 
in  1750,  paid  the  company  £100,000  and  an  end  then  came  to 
its  commercial  career.  But  its  chartered  privileges  were  as 
strong  in  law  as  ever,  and  prevented  a  number  of  rising  British 
concerns  from  carrying  out  ambitious  trading  plans.  In  1802 
and  1807  the  South  Sea's  exclusive  rights,  as  also  those  of  the 
East  India  Company,  were  modified  by  the  passage  of  acts 
permitting  any  British  ship  to  engage  in  fisheries  in  the  Pacific 
Ocean  without  a  license  from  either  company.  And  in  1805 
Parliament  enacted  a  law  declaring  that  the  interests  of  general 
British  commerce  demanded  the  South  Sea  Company's  sur- 
render of  its  sole  and  exclusive  trading  rights.  As  compensation 
for  the  relinquishment  of  these,  the  Government  paid  the 
company  £610,464.18 

In  1834  the  South  Sea  Company's  holdings  amounted  to 
£10,144,584,  of  which  £3,662,784  was  company  stock  and  the 
remainder  annuities.  On  all  of  these  the  Government  had  paid 
the  company  regular  interest,  now  totaling  more  than  £304,000 
annually,  which  was  distributed  among  the  stockholders.19 
Parliament  decided  in  1852-1853  to  terminate  the  anachronism. 
It  ordered  the  compulsory  commuting  of  the  company's  hold- 
ings by  their  exchange  for  Government  money  payments  or 
securities.20  This  done,  the  South  Sea  Company  passed  out  of 
existence  in  1854. 

But  to  recur :  So  effectively  had  the  French  nation  disabused 
itself  by  its  Mississippi  Company  experiences  that  for  fifty-six 
years  thereafter  no  one  had  the  hardihood  to  propose  establish- 
ing a  bank  with  power  to  circulate  its  notes.  For  an  even  longer 
time  the  French  people,  seared  with  memories,  were  immune 
to  speculative  fevers.  This  exemption,  however,  did  not  apply 
to  Louis  XV  and  his  courtiers,  who  shamelessly  speculated  in 


66  AMERICA  STRIKES  BACK 

wheat.21  But  a  new  and  self-confident  generation  to  which 
lessons  of  the  past  were  obscured  came  upon  the  scene.  Finding 
a  spirit  of  acquiesence,  or  at  any  rate  meeting  no  opposition, 
promoters  succeeded,  in  1776,  in  founding  in  Paris  a  new  bank 
for  the  double  purpose  of  making  loans  to  the  Government  and 
discounting  mercantile  paper.  Seeing  a  public  ready  and  in  fact 
eager  to  speculate,  the  bank's  directors  promoted  the  process 
by  old  devices  made  to  look  new,  and  in  1784  and  1785  a  great 
public  speculation  broke  forth.  The  French  Revolution  effaced 
the  bank. 

In  England  the  public  long  shunned  Exchange  Alley.  Pro- 
fessional speculation  still  went  on  with  its  frauds  as  vigorous 
as  ever  before.  Seeking  again  to  accomplish  what  previous  laws 
had  failed  to  bring  about,  Parliament,  in  1733,  passed  another 
law  for  suppression  of  stockjobbing  frauds.22 

In  a  chapter  on  "Honesty  in  Trade,"  Daniel  Defoe  thought 
that  possibly  "the  time  may  come,  in  spite  of  companies  and 
companies  of  sharpers,  that  honesty  may  be  able  to  appear 
upon  'Change  again;  and  whether  ever  it  may  in  the  Alley  or 
not,  I  dare  not  say."  23 

As  the  shock  of  the  South  Sea  Company's  collapse  and  the 
impoverishing  effects  of  its  stockjobbing  operations  gradually 
wore  away,  conditions  improved.  Marauding  continued  the 
partner  of  trade  in  India,  and  wealth  poured  into  the  coffers  of 
Britain's  possessing  classes.  By  1745  British  commercial  affairs 
were  in  such  good  shape  that  Horace  Walpole  could  satirically 
note:  "We  have  taken  infinite  riches;  vast  wealth  in  the  Indies, 
vast  from  the  West;  in  short,  we  grow  so  fat  that  we  shall  soon 
be  fit  to  kill."  24 


CHAPTER  VIII 
SECRET  FRAUD  AND  THE  REVOLUTION 

SOON  after  America  had  become  a  nation  there  were  corruption 
scandals  which  were  given  much  publicity.  Legislatures  were 
bribed  to  grant  bank  and  other  company  charters,  and  to  be- 
stow upon  corporations  and  speculators  gifts  of  tens  of  mil- 
lions of  acres  of  public  lands.  A  number  of  America's  leading 
public  men  and  jurists  were  instrumental  in  securing  or  vali- 
dating those  grants.1  But  British  critics  especially  were  pleased 
to  take  the  pose  of  regarding  these  corruptions  as  something 
uniquely  sinister,  and  of  condemning  them  as  the  progeny  of 
the  American  form  of  government.  To  the  plain  fact  that  such 
corruptions  were  only  a  continuation  of  the  practices  under 
British  rule  of  America  those  critics  were  wholly  oblivious. 

The  so-called  representative  form  of  government  function- 
ing in  the  British  Parliament  was  aristocratic,  with  the  lords  in 
the  upper  body,  and  the  lower  house  containing  many  of  their 
relatives.  Bribery,  fraud  and  intimidation  in  elections  had  long 
been  a  commonplace.  By  the  end  of  the  eighteenth  century  a 
total  of  sixty-five  statutes  to  prevent  such  corruption  and  fraud 
had  been  enacted  in  Britain.  These  laws  were  evaded  by  vari- 
ous devices,  one  of  which  was  the  employing  of  third  persons 
to  do  the  bribing;  there  was  no  law  applying  to  them.  Under  the 
"rotten  borough"  system  in  operation  until  1832,  a  handful  of 
propertied  voters  elected  the  majority  of  the  members  of 
Parliament.  This  fact,  according  to  a  statement  made  in  the 
House  of  Commons  in  1790  by  Henry  Flood,  a  noted  Irish 
politician,  had  been  given  as  a  reason  for  refusing  representa- 
tion to  the  American  colonies;  "when  the  American  complained 
that  he  was  not  represented  in  the  British  House  of  Commons 
he  was  told  that  only  a  small  part  of  the  people  of  England  were 
represented,  and  that  he  was  therefore  in  the  same  state  as  an 
infinite  number  of  the  people  of  England."  Flood  added  that 

67 


68  AMERICA  STRIKES  BACK 

the  English  were  in  the  habit  of  regarding  Americans  as  "an 
inferior  species  of  beings  who  ought  to  be  content  with  their 
station,  though  they  did  not  at  all  partake  of  the  elective 
capacity."  2 

Corruptly  elected  members  of  Parliament  were  accessories 
to  all  kinds  of  corrupt  measures.  Even  those  of  the  public  who 
were  able  to  read  had  no  means  of  learning  what  actually  went 
on  in  the  sacred  precincts  of  St.  Stephen's.  Browbeaten  by  the 
punitive  laws,  printers  were  compelled  to  resort  to  a  variety  of 
subterfuges.  Such  of  the  debates  as  they  dared  print  were  pre- 
sented in  a  frightfully  mutilated  way,  and  usually  were  pub- 
lished six  months  or  more  after  the  debates  had  taken  place. 
One  has  only  to  consult  the  news  sheets  and  magazines  during 
the  reigns  of  the  first  three  Georges  to  see  the  evasive,  often 
amusing,  contrivances  that  printers  were  obliged  to  employ. 
Names  of  Parliamentary  speakers  were  hidden  by  the  substitu- 
tion of  classical  appellations,  or  concealed  by  the  use  of 
asterisks,  or  blurred  by  the  elision  of  letters  in  names.  Speeches 
thus  printed  were  clothed  in  a  ludicrously  pompous  phraseology, 
a  monotonous  flow  of  rounded  sentences.  They  were  the  work 
of  writers  who  took  such  bits  of  speeches  as  they  were  able  to 
get  and  elaborated  upon  them.  Not  infrequently  adept  writers 
went  further  and  invented  entire  speeches.3 

While  in  Britain  the  press  was  thus  gagged,  the  efforts  of 
British  officials  in  America  to  enforce  British  libel  laws  were 
not  successful.  Upon  a  charge  of  seditiously  libeling  the  royal 
governor  Lord  Cornbury,  John  Peter  Zenger,  editor  of  the 
"New  York  Weekly  Journal,"  was  arrested  and  tried  in  1735. 
His  criticism,  in  reality,  was  aimed  more  at  the  British  Govern- 
ment than  at  the  governor.  The  jury  ignored  the  charge  of 
the  prejudiced  and  instructed  judges,  and  acquitted  him.  New 
York  City  residents  saluted  Zenger  with  cannon,  and  the 
municipality  presented  him  with  the  freedom  of  the  city  in  a 
gold  box.  Thereafter  in  America  there  were  some  further  prose- 
cutions but  no  jury  would  convict. 

In  the  year  following  the  outbreak  of  the  American  Revolu- 
tion there  was  a  lively  debate  in  Parliament  on  a  motion  made 
by  Temple  Luttrell  to  admit  reporters  (referred  to  in  the  Par- 
liamentary proceedings  as  "strangers")  to  the  gallery  of  the 


SECRET  FRAUD  AND  THE  REVOLUTION       69 

House  of  Commons.  Luttrell,  on  April  30,  1777,  urged  the 
abolition  of  the  long-standing  order  excluding  reporters.  Most 
of  the  laws,  he  stated,  had  been  passed  in  the  House  awith  a 
clandestine  privacy,  like  lettres  de  cachet  from  the  Court  of 
Paris."  Richard  Rigby  (a  sinecurist  holding  many  offices)  arose 
and  announced  that  he  had  always  voted  against  admitting 
reporters  and  would  continue  doing  so.  "What  good,"  he  asked, 
"could  result  from  strangers  being  in  the  gallery?  Only  to  print 
speeches  in  newspapers  of  all  sorts."  Sir  William  Meredith,  an- 
other member  of  the  House  of  Commons,  urged:  "None  but 
members  ought  to  be  present  during  the  debates  in  the  House. 
.  .  .  The  world  at  large,  even  our  immediate  constituents,  have 
no  just  claim  to  be  apprised  of  the  minutiae  of  the  debate." 
Luttrell's  motion  was  defeated  by  a  vote  of  83  to  16.4 

When  the  question  again  came  up  on  January  29,  1778,  the 
fact  developed  that  the  Speaker  had  somewhat  relaxed  the  strict 
order  against  admittance  of  reporters,  but  this  was  a  capricious 
decision  not  in  the  least  impairing  his  power  to  bar  reporters  at 
any  time.  One  member — Townshend — protested  that  it  was  un- 
constitutional to  shut  the  doors  generally  against  the  people 
whom  members  represented,  while  another  member — Vyner — 
thought  that,  as  every  member  had  the  right  to  order  strangers 
to  withdraw,  there  was  no  need  of  enforcing  it  to  an  extreme.5 

While  the  American  Revolution  was  in  progress  a  bill  was 
introduced  in  the  House  of  Commons,  on  April  13,  1778,  to 
exclude  men  who  held  Government  contracts  from  sitting  as 
members.  Sir  Philip  Jennings  Clarke  said  that  he  could  name 
many  instances.  Sir  Cecil  Wray  explained  that  the  bill  was  not 
one  aimed  at  decent  contractors  but  was  intended  to  prevent  the 
foul  deeds  of  men  leagued  with  Government  officials  to  rob 
the  public.  Colonel  Barre  demanded  open  contracts,  the  award- 
ing to  be  to  the  highest  bidder.  The  debate  was  exceedingly 
bitter  and  even  vituperative  on  the  part  of  Government  sup- 
porters. When  the  bill  was  again  discussed,  on  May  5,  follow- 
ing, Clarke  said  that  proof  had  been  presented  showing  how 
one  contractor  had  obtained  more  than  £35,000  above  the  ordi- 
nary profit  on  one  contract;  the  contractors  [profiteers],  he 
declared,  naturally  wanted  the  war  with  America  continued.6 
The  bill  was  defeated  by  a  vote  of  115  to  113.  Clarke,  however, 


70  AMERICA  STRIKES  BACK 

kept  pushing  the  bill,  with  denunciations  of  "the  influence  of 
contractors  on  elections  and  of  their  immense  profits."  In  the 
next  year  the  bill  was  adopted.  But,  as  was  soon  shown,  whether 
or  not  profiteers  sat  in  Parliament  they  were  able  to  carry  on 
their  operations  effectually. 

We  are  now  to  acquaint  ourselves  with  a  hitherto  unwritten 
chapter  of  the  American  Revolution.  That  the  following  facts 
have  not  been  presented  in  conventional  history  is  one  of  the 
most  extraordinary  of  omissions.  Of  privations  and  deeds  of 
the  American  Revolutionary  army  much  has  been  recounted; 
suffering  from  want  of  adequate  supplies  and  for  a  time  ill- 
disciplined,  that  army  won  its  way  to  victory  against  supposedly 
well-provided  and  disciplined  troops  backed  by  the  resources 
and  skill  of  the  wealthiest  of  nations. 

But  the  American  Revolutionists  had  a  virtual  ally  within 
Britain  itself  in  the  profiteers  who  plundered  army  and  navy 
funds,  and  committed  great  frauds  in  every  direction,  particu- 
larly in  foisting  bad  equipment  upon  Lord  Cornwallis'  army  in 
America.  Parliament  could  intimidate  reporters  and  editors  but 
it  could  not  squelch  rumor.  As  the  years  passed,  exasperation 
increased  at  failure  to  suppress  the  American  Revolution  which 
the  British  people  generally  had  been  led  to  believe  was  carried 
on  by  designing  leaders  heading  licentious  mobs  and  by  generals 
commanding  disordered  troops.  Dissatisfaction  in  Britain  with 
the  heavy  mounting  costs  of  the  war  became  acute.  Rumors 
spread  thickly  of  groups  of  army  and  navy  officers  and  in- 
fluential men  making  fortunes  in  a  short  time  from  war  con- 
tracts. Nor  were  these  rumors  without  visible  substantiation — 
the  spectacle  of  some  of  the  war  profiteers  vaunting  their 
wealth  in  gaudy  display.  The  pressure  of  public  opinion  from 
without,  and  the  indignant  demands  of  some  of  its  own  mem- 
bers, moved  the  House  of  Commons,  on  November  10,  1780,  to 
order  an  examination  of  the  public  accounts  and  a  full  report 
thereon. 

Now  came  a  series  of  sensational  disclosures,  the  extent  of 
which  was  not  anticipated  even  by  those  who  had  a  fair  knowl- 
edge of  the  profiteering  in  process.  The  Commissioners  ap- 
pointed performed  their  task  with  deadly  earnestness.  Explain- 


SECRET  FRAUD  AND  THE  REVOLUTION       71 

ing  first  the  machinery  of  army  profiteering,  the  Commissioners 
related  that  the  Quarter-Master  General's  function  was  to  pro- 
vide wagons,  horses  and  their  attendants  and  appendages  for 
the  army.  When  necessary,  the  Quarter-Master  General  could 
also  hire  vessels.  In  their  departments  the  Barrack-Master 
General  and  the  Chief  Engineer  exercised  the  same  powers.  The 
report  went  on: 

"It  is  the  duty  of  these  officers  to  make  contracts  for  the 
articles,  and  to  see  these  contracts  honestly  and  substantially 
performed.  .  .  .  But  it  has  been  the  usage,  so  far  back  as  our 
inquiry  has  gone,  for  the  officers  in  these  departments  to  be 
themselves  the  proprietors  of,  or  to  have  shares  or  interests  in, 
a  great  number  of  the  vessels  and  the  smaller  craft,  and  in  al- 
most all  the  wagons  and  horses  employed  in  these  services. 
These  officers  have  purchased  or  procured  them  upon  their 
own  account,  and  let  them  out  to  the  Government  at  a  fixed 
price  of  hire.  The  same  persons,  employed  by  and  acting  for 
the  public,  contracts,  on  the  part  of  the  public,  with  himself, 
for  the  hire  of  his  own  property,  controls  his  own  actions, 
and  pays  himself  with  the  public  money  entrusted  to  his 
charge.  .  .  . 

"This  practice  has  a  manifest  tendency  to  corrupt  and  en- 
danger the  service  of  the  army;  it  weakens  the  military  dis- 
cipline; it  infuses  into  the  soldier  the  thrift  for  his  own  gain, 
and  diverts  his  attention  from  honor  and  his  country's  service 
to  the  pursuit  of  wealth,  and  that,  too,  by  intrenching  upon  the 
treasure  of  his  country."  7 

The  report  showed  that  in  supplying  horses,  wagons  and 
attendants  to  Lord  Cornwallis'  army  in  America,  the  profiteers 
made  a  clear  profit  in  three  and  a  quarter  years  of  £241,960. 
On  December  23,  1780,  Lord  Cornwallis  ordered  a  change  in 
methods;  he  testified  later  that  on  several  occasions  he  had 
found  the  horses  and  wagons  supplied  "in  bad  condition  and 
unable  to  perform  the  service  required";  and  he  issued  orders 
that  the  Quarter-Master  General  should  have  no  property  in 
either  horses  or  wagons,  and  should  charge  the  Government 
no  more  than  the  amount  actually  paid.8  Whether  Cornwallis' 
instructions  were  carried  out  was  not  clear  to  the  Commis- 
sioners. Hence  they  computed  that  if  the  same  system  of  prof- 


72  AMERICA  STRIKES  BACK 

iteering  was  continued  to  June  18,  1782,  the  profiteers  reaped 
an  additional  profit  of  £175,902,  making  a  total  clear  profit  for 
horses,  wagons  and  attendants  of  £4 17, 592. 9  The  profit  thus 
paid  from  the  public  treasury,  the  Commissioners  stated,  repre- 
sented sums  beyond  what  the  cost  would  have  been  had  the 
horses  and  wagons  belonged  to  the  Government. 

The  sum  mentioned  was,  however,  only  part  of  the  loot  in 
the  Quarter-Master  General's  Department  and  in  allied  de- 
partments. These  paid  in  the  hire  of  vessels  (exclusive  of 
charges  for  pilotage  and  various  contingencies)  for  the  British 
army  in  America  the  sum  of  £127,483  from  December,  1776, 
to  March  31,  1780.  The  Commissioners  further  reported  that 
in  the  list  of  owners  of  these  vessels  the  names  of  subordinate 
officers  in  the  Departments  of  the  Quarter-Master  General, 
Barrack-Master  General  and  Commissary-General  did  appear. 
But  in  cases  in  which  head  officers  were  owners  or  had  shares, 
care  was  taken  not  to  record  their  names;  the  names  of  the 
vessels'  captains  were  inserted  in  their  stead.  How  lucrative  the 
business  was  to  the  profiteers  was  shown  by  the  Commissioners. 
A  vessel  of  100  tons,  hired  to  the  Government  at  13  shillings 
per  month  per  ton,  yielded  the  owner  £780  a  year.  "If 
possessed,"  the  Commissioners  went  on,  "of  50  large  wagons 
and  200  horses  (and  the  wagons  and  horses  were  in  general 
the  property  of  a  few  officers  only),  he  [the  owner]  will  have, 
as  long  as  he  can  continue  them  in  the  service  of  the  Govern- 
ment, a  clear  income  of  £9,885  secure  from  all  risk."  10 

Successive  Quarter-Masters  General  from  1776  to  1781  were 
Lieutenant-Colonel  William  Shirreff,  Sir  William  Erskine,  Lord 
William  Cathcart,  Brigadier-General  Dalrymple  and  Captain 
Henry  Savage.  To  them  had  been  issued  a  sum  totaling 
£1,688,379.  To  three  Barrack-Masters — Major-General  James 
Robertson,  Lieutenant-Colonel  George  Clark  and  Major 
William  Crosbie— had  been  issued  a  total  of  £662,419.11 
Profiteering  was  so  great  that,  in  his  order  of  December  23, 
1780,  Lord  Cornwallis  directed  that  all  necessary  craft  should 
thereafter  be  purchased  for  Government  account,  and  that  all 
unnecessary  vessels  hired  to  the  Government  should  be  dis- 
pensed with.  At  the  same  time  Cornwallis  ordered  the  Com- 
missary-General to  charge  no  more  for  fresh  provisions,  flour 


SECRET  FRAUD  AND  THE  REVOLUTION       73 

and  Indian  meal  than  what  those  foods  cost  him.12  From  1776 
to  1781  there  was  issued  to  three  Commissaries-General  a  total 
of  £1,521,076. 

The  allowance  of  vouchers  without  sufficient  examination 
"pervades  every  branch  of  the  expenditures  under  our  con- 
sideration," the  Commissioners  reported.  "Of  the  £10,000,000 
and  upwards  that  have  been  issued  for  these  [army]  services 
within  the  last  six  years,  accounts  of  a  few  officers  only,  amount- 
ing to  £1,100,000,  have  as  yet  been  rendered  to  the  proper 
office.  The  accounts  of  about  £8,760,000  still  remain  to  be  ac- 
counted for.7' 13  From  1776  to  1780  the  total  sums  issued  for 
British  army  supplies  and  provisions  in  America — including 
£322,308  to  the  Chief  Engineer's  Department— were  £4,194r 
183.  Dealing  with  the  plundering  of  a  large  part  of  this,  the 
Commissioners  suggested  the  possibility  that  "the  public  might 
be  enabled  to  obtain  restitution  where  they  have  been  de- 
frauded, and  security  against  imposition  and  peculation  for  the 
future."  14  Need  it  be  said  that  the  profiteers  were  able  to  keep 
their  loot? 

But  these  were  not  the  only  startling  facts  the  Commissioners* 
found  as  to  peculations  of  Government  army  funds.  Calling  for 
all  records  the  Commissioners  received  and  examined  old  as 
well  as  recent  accounts.  From  the  past  came  proofs  that  pecula- 
tions were  of  long  standing  and  of  magnitude.  Henry,  Earl  of 
Lincoln,  Paymaster-General,  had  received  from  the  Exchequer 
in  six  months  from  December,  1719,  to  June,  1720,  the  sum  of 
£473,127  of  which,  the  Commissioners  reported,  no  account 
was  ever  given,  nor  could  the  money  be  traced  in  any  way; 
"neither  book  nor  paper  relative  to  this  account  is  to  be  found" 
in  either  the  Paymaster's  or  Auditor's  office.15  As  the  Commis- 
sioners reported  in  another  case  uncovering  an  old  peculation, 
there  was  no  reason  for  probing  further  into  the  distant  past; 
their  inquiries  were  concerned  with  recent  years  and  the 
present.  Having  stumbled  upon  the  Earl  of  Lincoln's  defalca- 
tion they  did  not  pursue  investigations  of  the  accounts  of  early 
or  mid-eighteenth  century  Paymasters-General. 

"It  has  been  the  practice  of  the  Paymasters-General,  when 
they  went  out  of  office,"  reported  the  Commissioners,  "to  take 
with  them  the  books  and  papers  that  relate  to  their  accounts,  as 


74  AMERICA  STRIKES  BACK 

their  own  private  property,  although  these  official  books  are, 
and  should  be  considered  as  the  property  of  the  public,  and,  as 
such,  left  and  deposited  in  the  Pay  Office,  for  the  use  and 
information  of  posterity."  16 

In  the  years  immediately  preceding  1768  the  successive 
Paymasters  of  the  Forces  were  Lord  Henry  Holland,  Charles 
Townshend,  Lord  North,  George  Cooke  and  Thomas  Town- 
shend.  The  private  retention  of  public  money  by  Paymasters  of 
the  Force  after  they  had  left  office,  was,  the  Commissioners 
reported,  aa  usage  of  office."  At  the  time  of  his  resignation  a 
Paymaster-General  took  with  him  a  sum  of  public  money  which 
he  kept  in  his  possession  until  his  accounts  were  passed  by  the 
Auditors  of  the  Impost. 

Of  the  loss  to  the  public  the  Commissioners  reported:  "A 
computation  of  interest  at  four  per  cent  per  annum,  upon  these 
balances  every  year,  from  six  months  after  they  had  severally 
resigned  the  office,  proves  that  the  loss  of  money  left  in  the 
hands  of  Lord  Holland  amounts,  at  simple  interest,  to  £248,394; 
of  Mr.  Charles  Townshend  to  £24,247;  of  Lord  North  and  Mr. 
Cooke  [jointly]  to  £18,775;  of  Mr.  Cooke  and  Charles  Town- 
shend [jointly]  to  £3,419."  These  sums,  with  odds  of  shillings 
added,  totaled  £294,836  actual  loss  to  the  public  in  loss  of 
interest. 

The  Paymasters-General,  the  Commissioners  further  re- 
ported, constantly  had  in  their  hands  sums  much  larger  than 
were  needed  for  army  service.  Nearly  £46,000,000  was  issued 
to  Lord  Holland;  not  until  seven  years  after  his  resignation  was 
his  final  account  handed  in  to  the  Auditor.  It  was  eleven  years 
after  his  resignation  that  Charles  Townshend  accounted  for  the 
£2,000,000  in  his  hands;  and  twelve  and  eleven  years  after  they 
had  left  office  before  the  subsequent  Paymasters-General  turned 
in  their  accounts.17 

Of  the  funds  that  they  took  with  them  upon  quitting  office, 
four  Paymasters-General  returned  the  balances  to  the  Ex- 
chequer about  twelve  years  after  their  resignation,  and  then 
only  upon  peremptory  orders  of  the  Commissioners.  When 
leaving  office  Lord  Holland,  for  example,  took  £460,000; 
thirteen  years  passed  and  his  representatives  paid  back  £200,- 
000  into  the  Exchequer;  two  more  years  went  by  and  then 


SECRET  FRAUD  AND  THE  REVOLUTION       75 

upon  demand  of  the  Commissioners  £256,000  more  was  re- 
turned. During  all  of  this  time  Lord  Holland  had  the  benefit 
of  the  interest.18 

Proved  malfeasances  or  peculations  in  the  Navy  Department 
reached  far  back.  The  records  disclosed  a  hitherto  unknown 
and  unsuspected  fact,  namely  that  Lord  Anthony  Falkland, 
Navy  Treasurer  in  the  late  seventeenth  century,  left  an  unpaid 
balance  of  £27,611  due  from  him  to  the  Exchequer.  "We  did 
not  misspend  our  time  in  a  pursuit  where  there  was  so  little 
probability  of  benefit  to  the  public,"  the  Commissioners  re- 
ported. "A  debt  that  has  subsisted  for  near  a  century  may  be 
presumed  desperate." 19 

Confining  its  researches  to  recent  times  the  Commissioners 
dealt  with  the  accounts  of  Navy  Treasurers  Grenville,  Lord 
Harrington,  Lord  Howe,  Sir  Gilbert  Elliot,  and  of  the  incum- 
bent Welbore  Ellis.  The  report  stated  that  for  nearly  nineteen 
years  considerable  sums  of  public  money  had  remained  in  the 
hands  of  these  men  or  of  their  representatives.  Three  of  the 
Treasurers  had  received  for  Navy  service  upwards  of  £33,000,- 
000  the  accounts  of  which  were  not  yet  settled.  This  failure  to 
render  final  accounts  equally  applied  to  Grenville's  more  than 
£25,000,000,  and  to  Wellbore  Ellis'  £16,000,000  of  public 
funds.  "By  this  delay  in  making  up  the  accounts,"  the  Com- 
missioners commented,  "the  public  loses  the  use  at  least  of 
considerable  sums  of  their  own  money,  not  that  the  principal 
itself  has  always  been  safe."  20  When  a  Navy  Treasurer  retired 
he  could  refuse  from  pique  or  other  reasons  to  make  payments. 
By  that  means  he  could  hold  up,  for  eight  months  or  more, 
payment  of  all  seamen  at  the  various  ports.  Grenville  acted 
thus. 

Simultaneously,  in  all  departments,  there  was  a  system  of 
fees  and  emoluments  some  of  which  were  based  upon  needs  of 
ancient  times,  but  for  the  continuation  of  which  there  was  no 
longer  justification.  For  instance,  poundage  fees  derived  from 
the  times  when  transactions  were  carried  on  by  delivery  of 
actual  coin  of  various  denominations  and  weight,  and  often 
clipped  or  of  doubtful  weight.  Weighing  or  "poundage"  of  those 
coins  was  then  necessary.  But  for  decades  before  the  time  here 
dealt  with  payments  were  made  in  paper,  cash  notes,  drafts  or 


76  AMERICA  STRIKES  BACK 

bills  of  account.  Yet  the  old  charges  for  "poundage"  were  still 
made.  In  the  year  1778  alone  the  Paymaster-General  received 
£32,587,  and  in  later  years  even  more  for  "poundage"  fees;  the 
Paymaster-General  for  some  years  was  Richard  Rigby,  the 
same  who,  as  we  have  seen,  objected  in  Parliament  to  news- 
papers reporting  its  proceedings.21 

Other  kinds  of  fees  were  exacted  from  persons  doing  business 
in  the  Paymaster-General's  office.  In  1780  these  additional  fees 
amounted  to  more  than  £23,000  which  were  apportioned  among 
the  heads  of  the  office;  the  cashier's  salary  and  fees  of  £8,389 
in  that  year  give  an  indication  of  the  lucrative  division.22  In 
the  Navy  pay  office  there  was  a  list  of  fees  and  perquisites  paid 
by  persons  transacting  business  there.23  The  Auditor  of  Re- 
ceipts in  the  Exchequer  or  Treasury  was  appointed  for  life; 
the  Duke  of  Newcastle,  occupying  the  post,  received  in  1780  a 
nominal  salary  and  fees  making  a  total  of  £16,880,  of  which 
he  paid  various  sums  to  clerks  and  in  taxes,  making  his  net 
official  income  for  the  year  more  than  £14,000.24  In  the  same 
year  "poundage"  fees  of  £62,225  (and  that  sum  included  only 
what  the  Commissioners  were  able  to  discover)  were  paid  to 
Exchequer  officials  on  a  banknote  issue  of  £16,000,000.25  In 
the  Exchequer's  office  the  position  of  Usher  was  a  life  appoint- 
ment; he  was  allowed  a  profit  of  40  per  cent  on  the  purchase 
of  certain  supplies — stationery  and  some  other  articles — and 
a  large  profit  on  workmen's  bills  for  repairs;  his  net  income  in 
1780  was  £4,200.  The  Commissioners  reported  that  the  office 
of  Usher  was  superfluous;  that  during  the  year,  because  of  the 
profits  connected  with  it,  the  public  paid  £14,440  for  supplies 
really  worth  only  £9,187.26 

These  are  but  a  few  of  the  many  facts  brought  out  in  the 
Commissioners'  reports.  The  later  Tammany  Hall  system  of 
grafting,  which  British  critics  have  made  the  occasion  for 
frequent  taunts  at  America,  had  its  full-fledged  progenitor  in 
this  British  system.  The  Commissioners  thus  described  the 
system  of  fees  or  gratuities:  "It  is  a  species  of  emolument  in 
every  way  liable  to  abuse.  It  may  be  a  reward  for  civility,  favor 
or  extra  service;  it  may  be  also  the  purchase  of  undue  pref- 
erence, expedition  and,  in  some  cases,  of  procrastination. 
Flowing  at  first  from  the  liberality  of  opulence,  the  ostentation 


SECRET  FRAUD  AND  THE  REVOLUTION       77 

of  vanity  or  the  design  of  cunning,  it  very  soon  assumes  the 
name  of  custom.  .  .  .  The  public  voice  unites  with  that  of 
individuals  in  demanding  a  suppression  of  a  species  of  emolu- 
ments so  easily  perverted  to  purposes  injurious  to  the  interests 
of  both."  27 

Throughout  the  nineteenth  century  and  into  the  twentieth 
many  European  critics,  chiefly  British,  sneered  at  the  incompe- 
tence of  American  democracy,  and  some  even  in  the  United 
States  looked  back  longingly  to  the  times  when  a  capable 
aristocracy,  "trained  to  rule,"  had  directed  public  affairs.  Dur- 
ing the  American  Revolution,  Britain  was  run  by  an  aristoc- 
racy intrenched  in  important  offices.28  Of  the  incumbents  of 
those  offices  the  Commissioners  reported,  in  part:  "Educated  in 
and  accustomed  to  the  forms  in  use,  they  are  insensible  of  their 
[the  forms']  defects,  or  if  they  feel  them,  have  no  leisure,  often 
no  ability  to  correct  them.  Alarmed  at  the  idea  of  innovation, 
they  resist  the  proposal  of  a  regulation,  because  it  is  a  change, 
though  from  a  perplexed  and  intricate  to  a  more  simple  and 
intelligent  system." 29 

It  was  the  findings  of  these  Commissioners  that  gave  weight 
to  denunciations  such  as  Henry  Flood's,  when  he  declared  in 
the  House  of  Commons — March  4,  1790 — that  it  was  partly 
"the  influence  of  corruption  within  doors"  which  had  continued 
the  American  Revolutionary  War,  swept  away  so  much  of 
Great  Britain's  territory,  cost  Britain  £100,000,000  and  caused 
the  sacrifice  of  40,000  lives.30 


PART  THREE 
BAITING  OF  AMERICA  BEGINS 


CHAPTER   IX 
AN  ONRUSH  OF  CRITICS 

THE  European  industry  of  turning  out  books  critical  of  America 
and  Americans  began  in  force  with  the  visit  to  America  in  1795 
of  a  British  youth,  Isaac  Weld,  Jr.  His  father  held  a  lucrative 
Government  office  in  the  Irish  customs,  and  Isaac  Jr.  had  been 
born  in  Dublin.  He  was  educated  in  an  aristocratic  private 
school;  some  of  his  fellow  students  later  inherited  titles  or 
estates.  When  he  came  to  America  he  was  barely  twenty-one 
years  old.  At  such  an  immature  age  he  manifestly  had  no  under- 
standing of  the  real  import  of  the  great  changes  which  the 
American  system  had  introduced.  His  ideas  had  been  formed  by 
his  training  and  environment,  and  his  conclusions  were  those 
of  a  trivial  observer,  impressed  by  superficial  appearances.  Yet 
the  two  volumes  written  by  him  were  hailed  and  long  used  in 
Europe  as  those  of  an  unimpeachable  authority. 

Weld  spent  the  years  1795,  1796  and  1797  in  America, 
traveling  "pretty  generally"  through  Pennsylvania,  Delaware, 
Maryland,  Virginia,  New  Jersey  and  New  York.  In  the  pref- 
ace to  his  volumes  he  professed  that  his  motive  in  visiting 
America  had  been  to  ascertain  whether  or  not  the  accounts  of  a 
"happy  and  flourishing"  America  were  true,  and  whether 
America  was  an  eligible  place  for  Irish  emigration.  Considering 
the  text  of  his  volumes,  the  further  wording  of  the  preface 
hardly  seems  the  handiwork  of  a  mere  youth,  and  rouses  the 
suspicion  that  a  mature  and  adroit  mind  had  a  directing  share 
in  the  shaping  of  it.  Weld  asserted  that  he  had  gone  to  America 
"thoroughly  prepossessed  in  favor  of  the  people  and  the  coun- 
try," and  he  asked  his  readers  to  bear  in  mind:  "If  it  shall  ap- 
pear to  anyone  that  he  has  spoken  with  too  much  asperity  of 
American  men  and  manners,  the  author  begs  that  such  language 
may  not  be  ascribed  to  hasty  prejudice  and  a  blind  partiality 
[sic]  for  everything  American." 

81 


82  AMERICA  STRIKES  BACK 

On  his  visit  to  America  Weld  was  accompanied  by  a  servant, 
who  ministered  to  him  everywhere  with  the  deference  customary 
in  England.  Of  the  effect  of  this  sight  upon  farmers,  workmen 
and  tradesmen,  Weld  does  not  seem  to  have  had  the  slightest 
realization.  He  apparently  did  not  sense  why  they  balked  at 
catering  to  the  expectations  of  a  "young  gentleman."  At  any 
rate,  in  America  Weld  saw  three  monstrous  defects:  the  lack 
of  good  manners  among  "the  lower  sort  of  people";  an  Ameri- 
can disputatiousness  and  quarrelsome  disposition  over  politics; 
and  the  settlers'  roving  proclivities,  which  he  interpreted  as 
proof  of  a  money-making  obsession. 

On  the  score  of  bad  manners  he  included  "the  generality  of 
the  lower  sort  of  people  in  the  United  States  and  particularly 
those  of  Philadelphia."  Disclaiming  any  parallel  with  the 
deference  paid  by  the  lower  classes  in  Britain,  he  went  on:  "In 
the  United  States,  however,  the  lower  classes  of  people  will  re- 
turn rude  and  impertinent  answers  to  questions  couched  in  the 
most  civil  terms,  and  will  insult  a  person  that  bears  the  ap- 
pearance of  a  gentleman  on  purpose  to  show  how  much  they 
consider  themselves  on  an  equality  with  him.  Civility  cannot  be 
purchased  from  them  on  any  terms;  they  seem  to  think  it  is 
incompatible  with  freedom,  and  that  there  is  no  other  way  of 
convincing  a  stranger  that  he  is  really  in  a  land  of  liberty,  but 
by  being  surly  and  ill-mannered  in  his  presence." 

At  that  time  and  for  many  years  later  there  was  hi  America 
a  widespread  popular  sense  of  national  pride  in  the  newly 
established  equality,  and  a  consequent  expression  of  individual 
manliness  and  freedom.  Sometimes,  no  doubt,  these  manifesta- 
tions were  overdone  to  the  point  of  vaingloriousness.  But 
toward  prying  and  critical  strangers  the  course  of  the  mani- 
festation depended  upon  the  strangers'  conduct.  Weld  filled  his 
volume  with  sneers  at  "the  lower  orders."  When  in  America  he 
could  hardly  have  divested  himself  of  that  outlook  in  his  bear- 
ing, and,  it  is  not  unreasonable  to  suppose,  in  his  remarks. 

In  principle,  as  embodied  in  declarations  and  the  substance 
of  many  laws,  equality  for  whites  had  been  instituted.  Although 
titles  of  nobility  were  prohibited,  rank  of  position  still  prevailed 
socially,  and  suffrage  was  still  restricted  to  the  propertied 
classes.  But  in  various  other  respects  equality  of  standing  was 


AN  ONRUSH  OF  CRITICS  83 

shown  in  ways  that  were  as  enlightening  to  American  gentry  as 
they  were  disconcerting  to  European  critics.  A  few  years  before 
Weld's  visit,  an  American,  signing  himself  "A  Gentleman," 
wrote  with  astonishment  how  in  a  Philadelphia  celebration  the 
procession  comprised  all  classes  and  professions  marching  in 
equality.  "These  circumstances,"  he  commented,  "distinguished 
this  procession  from  the  processions  in  Europe.  .  .  .  Such  is 
the  difference  between  the  effects  of  a  republican  and  a  mo- 
narchial  Government  upon  the  minds  of  men!"  1  At  that  time, 
however,  there  was  still  the  force  of  propaganda  behind  the 
vilifying  of  "the  lower  orders,"  the  depreciation  of  them  as 
ignorant  churls.  "The  American  Museum  or  Universal  Maga- 
zine," the  patrons  of  which  were  America's  leading  public  men, 
from  George  Washington  down,  warned  its  readers  in  April, 
1792:  "The  idea  of  the  necessity  of  a  nobility  for  preserving 
decorum  in  and  giving  eclat  to  a  nation  has  been  assiduously 
propagated  throughout  the  world." 

To  many  Americans  politics  was  naturally  a  subject  inciting 
to  discussion  and  vehemence.  Weld  could  not  in  the  least  under- 
stand this:  in  Britain,  as  we  have  seen,  Parliamentary  seats 
depended  upon  relatively  few  voters,  too  often  bought  and  sold. 
At  the  time  of  Weld's  visit  to  America  the  rift  was  widening 
between  the  aristocratic  forces  headed  by  Alexander  Hamilton 
and  those  of  democracy  led  by  Thomas  Jefferson.  The  signifi- 
cance of  this  great  opening  struggle,  to  widen  in  later  years, 
Weld  did  not  understand,  nor  did  he  even  glimpse  the  grounds 
for  the  fierce  passions  that  it  evoked. 

The  predominant  spirit  of  America  in  those  days  was  the 
pioneering;  there  was  a  steady  movement  of  settlers  westward 
and  southward.  But  almost  wherever  they  went  pioneers  en- 
countered great  speculative  companies  claiming  or  owning  the 
land.  Until  the  year  1800  public  lands  could  not,  under  the 
laws,  be  bought  from  the  Government  in  tracts  of  less  than 
about  5,000  acres.  Even  after  the  laws  were  changed  the  path 
of  the  pioneer  was  beset  with  difficulties.  Albert  Gallatin,  Secre- 
tary of  the  Treasury,  reported  to  Joseph  Nicholson,  Chairman 
of  the  House  Committee  on  Public  Lands,  on  January  2,  1804, 
that  poor  persons  could  not  purchase  less  than  360  acres;  that 
in  order  to  become  freeholders  they  had  to  pay  $160,  and  be- 


84  AMERICA  STRIKES  BACK 

came  bound  for  $480  more,  payable  in  four  years.  If  they  had 
no  other  resources,  it  was  impossible  for  them  to  draw  means 
of  payment  from  the  produce  of  the  land.2  Wages  were  so  low, 
and  money  so  scarce,  that  for  the  average  farmer  or  laborer 
to  raise  a  few  hundred  dollars  was  an  almost  insuperable  task. 
If  he  managed  to  borrow  money  he  had  to  pay  usurious  interest. 

On  the  other  hand,  by  shifty  bargains  with  the  simple  Indians 
and  by  official  favor  or  connivance  land  companies  obtained 
enormous  areas.  A  brief  resume  of  the  monopolizing  of  these 
areas  and  of  the  methods  of  the  land  companies  is  essential,  to 
explain  how  Weld  came  to  the  most  fallacious  conclusions  in 
passing  judgments  upon  the  motives  and  conduct  of  settlers  in 
general. 

In  New  York  State  the  Phelps  and  Gorham  Company  pos- 
sessed in  a  single  holding  2,600,000  acres,  bought  from  the 
Seneca  Indians  for  so  paltry  a  price  that  each  individual  mem- 
ber of  that  tribe  received  only  a  dollar.3  For  the  insignificant 
payment  of  $100,000,  Robert  Morris  acquired  more  than 
4,000,000  acres  in  New  York  west  of  the  Phelps  and  Gorham 
purchase.  To  the  Holland  Company,  headed  by  the  banking 
firm  of  Willinck  &  Strapporst,  of  Amsterdam,  Holland,  Morris 
sold  more  than  a  million  acres  comprising  all  or  parts  of  many 
counties.4  The  Dutch  bankers  in  the  Holland  Company  had 
made  large  profits  from  the  American  Revolution,  and  they  re- 
invested the  further  profits  from  land  speculation  in  America 
in  American  transportation  enterprises.5  The  Holland  Company 
also  secured  large  areas  in  western  Pennsylvania. 

The  Ohio  Company  laid  claim  to  more  than  1,000,000  acres, 
and  sold  much  of  the  land,  including  the  site  of  the  City  of 
Cincinnati,  before  it  was  even  able  to  prove  its  ownership  claim 
by  obtaining  a  patent.6  To  promote  the  sale  of  the  lands  which 
It  claimed,  and  for  invidious  purposes  as  the  sequel  showed,  the 
Ohio  Company  organized  a  separate  concern,  the  Scioto  Com- 
pany, which  sold  considerable  of  the  Ohio  land  to  companies 
and  individuals  in  France-7 

Another  huge  stretch  of  land  on  the  Illinois  and  Wabash 
rivers  was  claimed  by  the  Illinois  Company  which  contended 
that,  in  1773  and  1775,  the  company,  then  composed  of  Lord 
Dunmore  and  various  British  and  American  lawyers  and  mer- 


AN  ONRUSH  OF  CRITICS  85 

chants,  had  bought  it  from  the  Indian  tribes;  the  purchase  price 
was  an  assortment  of  strouds,  blankets,  beads,  guns  and  other 
articles.8 

On  January  7,  1795,  the  Georgia  Legislature,  over  the  Gover- 
nor's protest,  had  passed  an  act  granting  to  four  companies, 
composed  of  American  capitalists  and  politicians  in  both  North 
and  South,  an  area  comprising  35,000,000  acres  extending  to 
the  Mississippi  River — a  domain  then  included  in  the  State  of 
Georgia.  Disclosures  soon  came  of  the  legislature  having  been 
bribed;  a  number  of  the  legislators  themselves  confessed  it. 
Thoroughly  indignant,  the  people  of  Georgia  elected  a  new 
legislature  pledged  to  repeal  the  act,  but  this  repeal  was  later 
voided  by  the  Supreme  Court  of  the  United  States  which  held 
that  the  original  grant  was  a  contract  incapable  of  annulment 
by  subsequent  legislation.9 

These  were  some  of  the  great  monopolistic  land  holdings. 
But  they  were  sometimes  conditioned  by  laws  obligating  com- 
panies to  make  actual  settlements  within  a  prescribed  period. 
In  Pennsylvania,  for  instance,  the  limit  was  two  years.  To 
evade  the  law  and  claim  immediate  title  the  Holland  Company 
brought  in  crowds  of  dummy  settlers,  each  of  whom  often 
claimed  as  many  as  twenty  locations,  or  settlements  as  they 
were  then  called.  But  when  real  settlers,  refusing  to  recognize 
these  fraudulent  settlements,  came  and  tried  to  establish  them- 
selves, there  resulted  conflict,  and  even  riot  and  bloodshed.10 
Ejected  by  force,  the  bona  fide  settlers  had  to  move  on  to  other 
territory  where  they  could  safely  settle.  In  Ohio  the  same 
necessity  confronted  many  settlers.  The  Ohio  and  the  Scioto 
companies  fell  to  quarrelling  as  to  which  held  the  title  to  land 
sold  to  French  settlers.  In  consequence,  these  settlers  found 
themselves  with  bad  titles,  and  had  to  petition  Congress  for  a 
grant  of  land  elsewhere  on  which  they  could  settle.11 

In  various  countries  there  has  been  some  spectacular  period 
which,  taken  by  itself,  seemed  to  impart  a  maleficent  cast  to 
the  nation  involved.  Such,  for  example,  was  the  period  of  the 
wild  South  Sea  Company  speculation  in  England  and  the 
Mississippi  Company  excitement  in  France.  But  on  such  oc- 
casions England  and  France  were  not  undergoing  visitations  by 
critics.  This  was,  however,  the  case  with  America  after  the 


86  AMERICA  STRIKES  BACK 

Revolution.  Weld  saw  the  extrinsic  things,  and  the  hot-pressed 
speculation  in  land  was  obvious.  Not  only  companies  in  a  large 
way  but  a  host  of  individuals  in  a  small  way  were  participants. 
This  jobbing  in  land  was  a  result  to  be  expected  from  the 
methods  of  the  time  and  the  conditions  of  a  country  where 
immense  areas  of  land  lay  vacant.  In  the  Old  World,  excepting 
in  France  after  the  French  Revolution,  the  land  was  largely 
held  in  great  estates  which  for  centuries  had  been  entailed  or 
otherwise  held  by  generations  of  possessors.  There,  so  far  as 
land  was  concerned,  there  was  little  or  no  disturbance,  and 
there  could  be  no  speculation. 

It  is  important  to  enlarge  upon  twenty-one-year-old  Weld, 
for  it  was  he  who  largely  was  instrumental  in  diffusing  the  no- 
tion of  a  money-mad  America.  That  land  companies  in  America 
inordinately  hoisted  the  price  of  land  was  a  most  common  com- 
plaint. He  could  not  help  seeing  this  plainest  of  facts,  and  he 
formed  an  immediate  assumption.  "The  wealth,"  he  wrote, 
"that  has  been  accumulated  by  particular  persons  in  the  United 
•States,  in  this  manner,  has  been  prodigious."  He  did  not  know, 
of  course,  that  to  carry  such  great  land  holdings  companies  or 
individuals  had  been  constrained  to  borrow  large  sums.  While 
Weld  was  still  in  America  a  number  of  these  promoters  became 
insolvent;  Robert  Morris,  for  example,  was  haled  before  a 
court  upon  the  charge  of  seeking  to  defraud  creditors  and  im- 
prisoned in  Philadelphia  for  inability  to  pay  the  judgment 
decreed. 

To  these  developments  and  their  significance  Weld  was  blind. 
But  the  bankruptcy  of  some  original  promoters  merely  meant 
the  transfer  of  the  unsold  lands  to  their  creditors.  A  Senate 
Committee,  on  February  9,  1812,  estimated  that  not  less  than 
30,000,000  acres  of  uncultivated  lands  in  the  States  and  Terri- 
tories west  of  the  Allegheny  Mountains  was  held  by  individ- 
uals.12 Weld  did  not  see  that  exorbitant  prices  demanded  for 
land,  and  fraudulent  operations  of  land  companies,  were  power- 
ful reasons  which  kept  settlers  in  motion  and  drove  them  from 
one  locality  to  another  in  the  aim  to  find  free  or  cheap  land.  The 
custom  of  the  British  upper  classes,  in  admonishing  the  lower 
"to  be  content  with  their  station,"  had  created  in  Weld  an 
antagonism  to  the  pioneering  movement  in  America.  The  rush- 


AN  ONRUSH  OF  CRITICS  87 

ing  about  of  men  and  families,  uprooting  themselves  and  wan- 
dering to  new  spots,  was  a  violation  of  the  European  code — a 
menace  to  regulated  forms  of  society. 

This  opposition  to  freedom  of  movement  by  the  "lower 
orders"  was  one  of  the  most  palpable  European  aristocratic 
antagonisms.  Yet,  of  the  long  list  of  European  critics  visiting 
America,  Alexis  de  Tocqueville  was  the  only  one  qualified  by 
judicious  perception  to  give  it  application.  In  his  notable  and 
comprehensive  study  "Democracy  in  America,"  first  published 
in  1835,  he  found  it  needful  to  point  out  that  immigrants  to 
America  were  not  a  new  species  of  human  beings  but  Europeans 
themselves.  He  explained  their  motives  and  their  evolution  in 
America.  "Emigration,"  he  wrote,  "was  at  first  necessary  to 
them  as  a  means  of  subsistence;  and  it  soon  becomes  a  game 
of  chance  which  they  pursue  for  the  emotions  it  excites,  as 
much  as  for  the  gain  it  procures.  In  Europe  we  are  wont  to 
look  upon  a  restless  disposition,  an  unbounded  desire  for 
riches,  and  an  excessive  love  of  independence  as  propensities 
very  formidable  to  society.  Yet  these  are  the  very  elements 
which  insure  a  long  and  peaceful  duration  to  the  republics  of 
America.  Without  these  unquiet  passions  the  population  would 
collect  in  certain  spots  and  would  soon  be  subject  to  wants  like 
those  in  the  Old  World  which  it  is  difficult  to  satisfy."  Else- 
where in  the  same  volume  Tocqueville  wrote:  "The  perpetual 
change  which  goes  on  in  the  United  States,  those  frequent 
vicissitudes  of  fortune,  accompanied  by  such  unforeseen  fluc- 
tuations in  private  and  in  public  wealth,  serve  to  keep  the 
minds  of  the  citizens  in  a  perpetual  state  of  feverish  agitation 
which  admirably  invigorates  their  exertions,  and  keeps  them 
in  a  state  of  excitement  above  the  ordinary  level  of  mankind. 
The  whole  life  of  an  American  is  passed  like  a  game  of  chance, 
a  revolutionary  crisis  in  a  battle." 

But  to  Weld  the  whole  American  scene  presented  itself  as 
an  appalling  scramble  for  money.  Thus  he  sweepingly  indicted 
Americans:  "The  American,  however,  does  not  change  about 
from  place  to  place  merely  to  gratify  a  wandering  disposition; 
in  every  change  he  hopes  to  make  money.  By  the  desire  of 
making  money,  both  the  Germans  and  the  Americans  of  every 
class  and  description  are  actuated  in  all  their  movements;  self- 


88  AMERICA  STRIKES  BACK 

interest  is  always  uppermost  in  their  thoughts;  it  is  the  idol 
which  they  worship."  13  Further:  "The  American,  however,  is 
of  a  roving  disposition;  he  takes  his  wife  with  him,  goes  to  a 
distant  part  of  the  country,  and  buries  himself  in  the  woods. 
...  In  the  back  parts  of  the  country  you  always  meet  num- 
bers of  men  prowling  about  to  try  and  buy  cheap  land;  having 
found  what  they  like  they  immediately  remove."  Making  a 
comparison  with  conditions  in  sedate  England  and  not  allowing 
for  the  unavoidable  crudities  and  hardships  of  pioneering  con- 
ditions in  America,  Weld  descanted  on  how  much  more  com- 
fortably the  English  farmer  lived  than  the  Pennsylvania  or 
Middle  West  farmer.  "That,"  was  his  comment,  "the  farmers 
do  not  live  better  in  America,  I  hardly  know  whether  to  ascribe 
to  their  love  of  making  money,  or  to  their  real  indifference 
about  better  fare;  it  may  be  owing  in  some  measure  to  both."  14 

To  deepen  his  disparagement  of  the  American  "lower  class 
of  people"  Weld  dwelt  at  length  upon  their  gambling  habits, 
and  their  cruelty  and  violence,  instancing  what  he  saw  in  Vir- 
ginia. He  reprobated  the  prevalent  gambling,  indignantly  told 
how  cockfighting  was  a  favorite  diversion,  and  depicted  "the 
common  people  in  taverns"  as  easily  coming  to  blows.  "They 
fight  like  wild  beasts.  ...  It  is  by  no  means  uncommon  to 
meet  those  who  have  lost  an  eye  in  a  combat,  and  there  are 
men  who  pride  themselves  upon  the  dexterity  with  which  they 
can  scoop  one  out.  This  is  called  gouging."  15  Of  this  kind  as 
well  as  other  kinds  of  brutality  there  were  not  lacking  actual 
instances,  but  Weld's  book  conveyed  the  impression  that  such 
practices  were  universal  characteristics  of  Americans. 

What  then,  at  the  same  time,  was  the  quality  of  Britain's 
civilization?  Did  it  possess  such  refinements  that  a  critic  from 
its  realms  was  justified  in  being  shocked  at  occasional  brawls  in 
American  taverns?  The  reply  to  these  questions  was  supplied 
by  denunciations  in  Parliament  itself. 

At  the  solicitations  of  humanitarians  a  bill  was  introduced  in 
Parliament,  on  May  24,  1802,  to  prevent  the  "barbarous 
custom"  of  bull  baiting  and  bull  running.  Sir  Richard  Hill 
depicted  "the  shocking  cruelties"  involved  in  these  practices. 
Another  member — Mr.  Windham — did  not  spare  aristocratic 
susceptibilities.  He  sarcastically  declared  that  the  influence  of 


AN  ONRUSH  OF  CRITICS  89 

horse  racing  was  more  pernicious;  that  the  crowds  at  horse 
races  "consisted  of  riff-raff  from  every  part  of  the  country;" 
that  from  amusements  enjoyed  by  the  rich  the  poor  were  ex- 
cluded by  their  poverty  and  the  law's  rigors;  he,  therefore, 
would  move  to  prohibit  hunting,  shooting,  fishing  and  all  of 
the  sports  of  the  higher  classes.  A  third  speaker — Mr.  Courte- 
nay — described  how  in  Britain  bears  were  trained  to  dance  to 
music  in  the  streets  by  putting  a  hot  iron  under  their  feet,  the 
pain  making  the  animal  associate  movement  with  music.  Still 
another  member — Colonel  Grosvenor — uttered  his  view,  most 
unkind  to  the  sons  and  cousins  of  peers  sitting  in  the  House  of 
Commons,  that  the  "lower  orders"  were  as  much  entitled  to 
their  bull  amusements  as  were  the  higher  classes  to  the  sports 
they  called  their  pleasure.16 

Nearly  thirty  years  later  cruelty  to  animals  was  still  an 
agitated  subject  in  Britain.  A  report  of  an  investigating  Parlia- 
mentary committee  told  of  the  British  sport  of  dog  fighting  in 
dog  pits,  and  of  the  not  uncommon  performance  of  making 
dogs,  often  wounded  and  exhausted,  draw  burdensome  trucks. 
The  committee  also  gave  its  attention  to  the  practice  of  skin- 
ning cats  and  dogs  when  alive,  and  it  dealt  with  the  evils  of 
cockfighting,  which  cruel  sport,  it  pointed  out,  was  "patronized 
by  persons  of  rank."  17  As  for  gambling  in  Britain,  Parliamen- 
tary reports  on  it  were  frequent  in  the  early  nineteenth  century. 
In  London  alone,  say  in  1815,  the  sums  waged  in  gambling  ex- 
ceeded those  in  the  whole  of  America;  in  the  single  item  of 
lotteries,  not  to  mention  other  forms  of  gambling,  millions  of 
pounds  were  staked.  Originating  in  the  upper  classes,  the  habit 
of  gambling  so  thoroughly  infected  the  lower  that  on  London 
streets,  especially  on  Sunday,  even  gangs  of  children  had  their 
unrestrained  and  boisterous  gaming  parties.  As  to  the  astound- 
ing prevalence  of  drunkenness  in  Britain  and  its  consequences, 
as  shown  by  Parliamentary  investigations,  the  facts  will  be 
given  later. 

Almost  invariably,  when  a  book  was  published  by  a  youth, 
European  reviewers  treated  it  jestingly  or  dismissed  it  with 
a  few  caustic  lines.  But  the  bitterness  among  Tories  in  Britain 
toward  America  since  the  American  Revolution  and  the  enmity 
among  European  aristocracies  in  general  against  the  nascent 


90  AMERICA  STRIKES  BACK 

American  democracy  were  factors  prompting  the  wide  ap- 
proval of  Weld's  volumes.  These  gave  European  deriders  of 
America  the  material  that  they  eagerly  craved.  Published  in 

1799,  in  London,  Weld's  volumes  ran  through  many  editions 
in  that  city.  A  French  translation  was  brought  out  in  Paris  in 

1800,  and  a  German  translation  at  The  Hague  in  the  next 
year.  In  their  attacks  upon  American  ways  and  institutions, 
British  and  other  publications  for  years  used  Weld's  produc- 
tion as  their  basis. 

But  his  was  not  the  only  book  to  serve  their  purpose. 
In  the  years  that  Weld  was  in  America  the  Due  de  La 
Rochefoucauld-Liancourt  also  was  on  a  scanning  tour  here. 
Rochefoucauld  was  a  monarchist  professing  liberal  principles; 
his  reputation  as  a  philanthropist  came  from  his  interest  in 
prison  reform  and  from  his  founding  on  his  estate,  Liancourt, 
near  Clermont,  a  school  for  the  education  of  poor  soldiers' 
children.  His  whole  idea  of  philanthropy,  however,  was  the 
patronizing  one  of  aristocratic  bounty.  He  had  been  devotedly 
attached  to  the  person  of  Louis  XVI,  and  had  tried  in  the 
French  Revolution  to  prepare  for  Louis'  flight  from  France. 
Rochefoucauld  emigrated  from  France  shortly  after  the  storm- 
ing of  the  Tuileries,  on  August  10,  1792. 

His  four  volumes  on  America  were  published  in  France  in 
1798,  and  the  next  year  in  England.  In  the  translator's 
preface  to  the  London  edition,  H.  Neumann  told  how,  al- 
though Rochefoucauld  favored  mild  principles  of  political  re- 
form, he  was  a  victim  to  the  French  Revolution  and  an  outcast. 
"Throughout  the  whole  of  his  American  journies,"  translator 
Neumann  further  wrote,  "there  appears  to  have  reigned  in 
the  mind  of  this  illustrious  exile  a  melancholy  cast  of  imagi- 
nation, with  a  peevish  irritability  of  feeling,  such  as  is  very 
natural  for  misfortunes  like  his  to  produce.  Every  scene  of 
beneficent  conduct  from  great  landholders  toward  their  de- 
pendents brings  to  his  remembrance  his  own  endeavors  to  en- 
lighten and  bless  the  peasantry  upon  those  estates  in  France 
which  once  were  his  own." 

In  dealing  with  Rochefoucauld's  attitude  when  in  America, 
Neumann  added:  "He  complains  of  a  dirty  room,  a  hard  bed, 


AN  ONRUSH  OF  CRITICS  91 

a  scanty  meal,  as  if  it  were  a  grievous  misfortune.  He  has  a 
peculiar  quickness  of  eye  at  discerning  sloth,  knavery  and  mis- 
chief wherever  he  travels.  The  wounds  which  his  spirit  had 
suffered  were  still  fresh  or  suffering;  and  were  therefore  liable 
to  be  grievously  inflamed  and  irritated  by  the  slightest  degree 
of  new  laceration."  Nevertheless,  Neumann  accorded  Roche- 
foucauld's book  the  virtue  of  being  free  from  all  affectation. 
"He  appears  to  have  been  content  to  ride  on  horseback,  with- 
out a  servant,  and  to  travel  without  aught  of  the  pomp  of 
greatness,  or  the  luxury  of  opulence,  just  as  if  he  had  never  been 
more  than  a  plain  farmer  or  manufacturer  in  France."  18 

As  an  experienced,  conciliatory  traveler,  Rochefoucauld,  un- 
like Weld,  invited  no  rebuffs  and  received  none.  He  wrote  that 
in  every  part  of  America  "the  obliging  civilities  that  I  have 
experienced  proved  how  false  and  groundless  are  those  preju- 
dices which  the  French  and  the  English  so  obstinately  entertain 
to  the  disadvantage  of  the  Americans."  And  he  elaborated: 
"Were  I  in  this  instance  to  form  my  ideas  from  my  own 
personal  experience  alone,  they  also  might  in  like  manner  be 
branded  with  the  appellation  of  prejudice;  but  I  have  found 
my  opinion  corroborated  by  that  of  every  traveler  whom  I 
have  had  the  opportunity  of  seeing,  and  who  thought  proper 
to  judge  for  himself,  uninfluenced  by  partiality."  19 

But  Rochefoucauld  could  not  detach  from  his  writings  an 
habitual  aristocratic  hauteur.  He  repeatedly  expatiated  upon 
"the  inferior  class  of  the  American  people."  The  most  common 
vice  among  that  class,  he  asserted,  was  drunkenness.  This  was 
only  relatively  true,  for  among  the  rich  inebriation  was  both  a 
habit  and  a  social  custom.  But  for  the  drunkenness  of  "the  in- 
ferior class"  he  concluded  that  "there  are,  without  doubt, 
fewer  crimes  committed  in  America  than  among  an  equal  num- 
ber of  people  in  Europe."  20  He  charged  that,  in  some  measure, 
prolixity  was  the  common  fault  of  American  orators — which 
was  all  too  true — and  he  grew  ironic  over  a  Congressional 
declaration  that  Americans  were  "the  most  enlightened  nation 
in  the  whole  world."  It  was  itself,  he  remarked,  "a  proof  of 
that  good  opinion  they  have  of  themselves." 

But  the  note  most  loudly  struck  in  Rochefoucauld's  volumes 
was  the  greed  he  attributed  to  Americans.  "The  desire  for 


92  AMERICA  STRIKES  BACK 

riches  is  their  ruling  passion,  and  indeed  their  only  passion." 
This  assertion  he  frequently  repeated.  "Excessive  avidity  of 
becoming  rich  is  the  common  characteristic  of  the  American 
people  and  especially  in  the  inhabitants  of  cities."  (His  pro- 
nouncement, it  need  hardly  be  pointed  out,  differed  from  that 
of  Weld,  who  saw  money  the  passion  of  farmers  and  settlers 
in  particular.)  With  an  air  of  judicial  qualification  Rochefou- 
cauld went  on:  "But  this  disposition  does  not  hurry  them  on 
to  avarice.  They  know  how  at  proper  times  to  be  expensive 
[sic]  even  without  ostentation,  and  they  do  not  refuse  to  assist 
the  unfortunate,  when  proper  opportunities  occur."21  Roche- 
foucauld made  no  effort  to  compare  the  actions  of  the  Ameri- 
can trading  class  with  those  of  the  European  trading  classes, 
the  money  absorption  of  which  was  notorious.  He  wrote  as  a 
nobleman  echoing  nobility's  scorn  of  trade. 

At  that  time  he  was  accused  by  at  least  one  British  maga- 
zine 22  of  filling  his  work  with  vilifications  of  Britain,  so  as  to 
ingratiate  himself  with  the  Directory,  then  governing  France, 
and  get  back  his  estates.  (In  fact,  after  becoming  First  Consul, 
Napoleon  authorized  the  Duke  to  return  to  Liancourt,  which 
was  restored  to  him.)  Dealing  with  every  condition  in  America, 
political,  industrial,  geographical,  climatic  and  other,  Roche- 
foucauld's volumes  had  an  enormous  influence  in  France  and 
in  England.  In  America  they  were  considerably  read.  However 
critics  in  Britain  at  first  resented  his  comments  upon  British 
policy  and  laws,  they  soon  overlooked  these  aspersions,  and 
selected  from  his  work  those  parts  which  they  could  appropri- 
ately cite  to  prove  the  greed  of  the  American  character. 

Among  the  British  visitors  to  America  was  another  whose 
book  likewise  was  used  as  a  verification  of  American  greed. 
Richard  Parkinson,  author  of  "The  Experienced  Farmer," 
knew  about  cattle  and  pigs,  and  about  farming  conditions  and 
problems  as  they  were  in  England,  but  he  was  void  of  knowl- 
edge on  any  other  subject.  The  result  of  his  tour  in  America, 
in  1798,  1799  and  1800,  was  a  work  of  two  volumes  published 
in  1805,  on  American  society,  manners  and  agriculture.  His 
dedication  of  the  book  "To  His  Royal  Highness,  the  Duke  of 
York"  began:  "Sir,  In  times  like  these,  when  the  wicked  in- 


AN  ONRUSH  OF  CRITICS  93 

tentions  and  wild  chimeras  of  misguided  or  designing  men  have 
so  widely  disseminated  principles  of  a  fallacious  equality  as 
to  shake  all  Europe  to  its  foundation,  it  becomes  the  duty  of 
every  reasonable  person,  especially  the  inhabitant  of  this  truly 
free  nation  [Britain],  to  manifest  a  love  of  order  by  proper 
expressions  of  regard  for  high  station  and  illustrious  an- 
cestry." 23 

In  his  book  Parkinson  made  grievous  complaints  of  "the  dis- 
respectful manners  of  white  servants  toward  masters,"  which 
behavior  he  ascribed  to  "notions  of  equality,"  and  he  wailed 
about  his  having  had  to  clean  his  own  boots  and  shoes,  even 
though  there  were  four  servants  in  the  house.  "The  idea  of 
liberty  and  equality  there,"  he  wrote,  "destroys  all  the  rights  of 
the  master,  and  every  man  does  as  he  likes."  24  He  pronounced 
land  in  America  almost  worthless  for  agricultural  purposes: 
"The  produce  is  so  small  and  the  expense  so  great  that  I  never 
saw  any  land  worth  having  in  America."  And,  "To  look  at 
America  in  the  most  favorable  way  you  can,  as  a  nation,  there 
is  nothing  but  extent  of  territory  to  entitle  it  to  the  consequence 
it  assumes."  25  Parkinson  averred  that  Americans  were  such 
sharp  traders  that  Jews  could  not  do  well  in  America.  "All  of 
the  men  in  America,"  he  wrote,  "make  money  their  pursuit."  26 

Charles  William  Janson,  a  lawyer,  had  made  a  fortune  in 
England.  He  lost  some  of  this  by  speculating  in  American  se- 
curities. To  America  he  came  to  recoup  himself  by  land  specula- 
tion, in  which  he  again  suffered  losses.  While  in  America  he 
lost  still  further  by  investments  in  a  shipping  concern.  His  losses 
soured  him.  Apart  from  that,  he  had  deep,  unalterable  prejudices 
against  the  social  and  political  innovations  America  had  in- 
troduced. Despite  his  residence  for  a  time  in  Rhode  Island,  in 
which  State  he  took  up  the  profession  of  councilor  at  law,  he 
made  no  attempt  to  change  in  the  least  degree  his  caste  attitude. 
On  his  return  to  England  he  wrote  a  book,  which  he  published 
in  1807. 

In  the  preface  he  declared  of  himself:  "Among  the  lower 
orders,  in  spite  of  his  endeavors  to  adapt  his  behavior  to  their 
satisfaction,  he  was  regarded  as  proud  and  haughty."  He  con- 
tinued: "Though  the  Americans  declaim  in  favor  of  liberty 
and  equality,  yet  nowhere  are  those  terms  more  unworthily 


94  AMERICA  STRIKES  BACK 

prostituted.  That  equality,  the  establishment  of  which  was  a 
favorite  object  of  the  revolutionary  republicans  of  France,  is 
still  the  idol  of  the  mob  in  the  United  States.  The  meanest 
plebeian  would  be  quite  ungovernable  did  he  barely  suspect 
you  of  harboring  the  idea  that  he  was  inadmissable  to  equal 
rank  with  the  best-informed  of  his  fellow  citizens.  Hence  you 
are  accosted  by  people  of  the  lowest  description  with  familiarity, 
and  answered  with  carelessness.  This,  it  is  obvious,  cannot  be 
a  very  enviable  state  of  society  for  a  person  educated  in  Eu- 
ropean notions  of  the  decorum  necessary  to  be  observed  in 
civilized  life."27 

The  text  of  Janson's  book  was  in  keeping  with  the  tone  and 
view  of  the  preface.  To  him  the  new  rights  of  man  became 
"the  deplorable  effects  of  uncontrolled  liberty,"  and  to  suit 
this  view  he  magnified  and  misrepresented  every  incident.  "One 
of  the  great  evils  of  a  republican  form  of  goverment  is  a  loss 
of  that  subordination  in  society  which  is  essentially  necessary 
to  render  a  country  agreeable  to  foreigners.  .  .  .  The  meaning 
of  liberty  and  equality  in  the  opinion  of  the  vulgar,  consists  in 
impudent  freedom  and  uncontrolled  licentiousness,  while  boys 
assume  the  airs  of  full-grown  coxcombs."  Janson  pictured 
America  as  a  land  peopled  with  fraudulent  land  speculators, 
fraudulent  merchants  and  sharpers,  and  as  a  place  of  duplicity 
and  extortion. 

A  year  after  the  appearance  of  Janson's  book,  Thomas  Ashe's 
three  volumes  were  published.  A  few  characteristic  extracts 
will  suffice  to  give  an  adequate  idea  of  the  malevolence  filling 
these.  America  was  a  country  "where  sordid  speculators  alone 
succeed."  The  American  States  through  which  he  passed  were 
"unworthy";  in  the  Southern  States  "society  was  in  a  shameful 
degeneracy."  These  conditions  were  "an  additional  proof  of  the 
pernicious  tendency  of  those  detestable  principles  of  political 
licentiousness"  which  "make  men  turbulent  citizens,  abandoned 
Christians,  inconstant  husbands,  unnatural  fathers  and  treach- 
erous friends."  An  American's  "sluggish  faculties  required 
palpable  and  active  objects  to  give  them  exercise."  Americans 
were  "a  race  of  impudent,  selfish,  sordid  individuals,  without 
either  principle  or  common  humanity."  M.  Buff  on  "was  per- 


AN  ONRUSH  OF  CRITICS  95 

fectly  right  in  his  assertion  that  man  and  beast  degenerated  in 
America."  28 

A  few  years  later  John  Bradbury,  a  London  naturalist,  made 
a  tour  of  the  entire  Louisiana  and  of  the  Middle  Western 
regions.  He  was  not  concerned  with  criticizing  people  but  with 
collecting  plants.  In  his  book  he  sought  to  caution  European 
critics  against  hasty  judgments  of  Americans  and  snobbish 
conduct.  West  of  the  Alleghenies,  he  wrote,  the  settlers  were 
from  almost  every  country  in  Europe,  and  from  such  a  people 
not  yet  amalgamated  it  was  absurd  to  expect  the  forming  of  a 
general  character.  He  then  gave  this  instruction  and  warning: 

"That  species  of  hauteur  which  one  class  of  society  in  some 
countries  show  in  their  intercourse  with  one  another  is  here 
[in  America]  utterly  unknown.  By  their  constitution,  the  ex- 
istence of  a  privileged  order,  vested  by  birth  with  hereditary 
privileges,  honors  or  emoluments,  is  forever  interdicted.  If, 
therefore,  we  should  here  expect  to  find  that  contemptuous  feel- 
ing in  man  for  man,  we  shall  naturally  examine  those  clothed 
with  judicial,  or  military  authority;  but  we  should  search  in 
vain.  .  .  . 

"Travelers  from  Europe  in  passing  through  the  western  or 
indeed  any  part  of  the  United  States,  ought  to  be  previously 
acquainted  with  this  part  of  the  American  character,  and  more 
particularly  if  they  have  been  in  the  habit  of  treating  with  con- 
tempt, or  irritating  with  abuse  those  whom  accidental  circum- 
stances may  have  placed  in  a  situation  to  minister  to  their 
wants.  Let  no  one  here  indulge  in  abusing  the  waiter  or  hostler 
at  an  inn;  that  waiter  is  probably  a  citizen,  and  does  not,  nor 
cannot  conceive  a  situation  in  which  he  discharges  a  duty  to 
society,  not  in  itself  dishonorable,  should  subject  him  to  insult; 
but  this  feeling,  so  far  as  I  have  experienced,  is  entirely  de- 
fensive. I  have  traveled  near  10,000  miles  in  the  United  States, 
and  have  never  met  with  the  least  incivility  or  affront."  And 
Bradbury  added:  "Other  European  travelers  have  experienced 
this  liberal  spirit  of  hospitality,  and  some  have  repaid  it  by 
calumny.  These  calumnies  have  reached  them  [the  Americans] ; 
they  are  well  acquainted  with  what  Weld  and  a  person  who  calls 
himself  Ashe  have  said  of  them."  Bradbury  inserted  a  footnote 


96  AMERICA  STRIKES  BACK 

on  Ashe's  book  which,  he  said,  was  "full  of  malignant  false- 
hoods." 29 

Similarly,  another  British  visitor,  John  Palmer,  who  later 
came  to  America  to  study  the  soil  and  farming,  scorned  cur- 
rent misrepresentations  of  America.  "Most  of  the  travels  I  have 
seen,"  he  wrote,  "are  full  of  prejudice  and  invective  against 
America  and  Americans,  which  in  some  instances,  the  authors 
could  scarcely  feel;  and  who,  perhaps,  inserted  them  for  no 
worse  motive  than  to  make  their  publications  palatable  to 
readers.  This  is  particularly  the  case  in  'Janson'  and  'Parkinson7 
and  <Ashe.' " 30 

Any  book  favorable  to  America  was  ignored  or  sneered  at 
by  British  reviewers.  But  the  books  condemnatory  of  America 
were  given  profuse  space  and  approval.  How  these  books, 
especially  Weld's  and  Rochefoucauld's,  were  used  as  authorita- 
tive justification  for  damnation  of  Americans  was  exemplified 
by  a  long  diatribe  in  "The  Quarterly  Review,"  one  of  the  most 
influential  of  British  publications.31  Variously,  as  suited  its  pur- 
pose, it  cited  or  amplified  both  Weld  and  Rochefoucauld,  and 
burst  forth  thus: 

".  .  .  There  is,  however,  both  in  the  physical  and  intellectual 
features  of  the  Americans  a  trace  of  savage  character,  not 
produced  by  crossing  the  breed,  but  by  the  circumstances  of 
society  and  of  external  nature.  It  is  only  in  the  great  cities  and 
their  vicinity  that  the  accompaniments  of  civilization  are  found; 
in  the  new  settlements  everything  partakes  more  of  savage  than 
of  civilized  life.  The  back  settlers,  useful  as  they  are  when 
considered  as  the  pioneers  of  civilization,  are  a  worse  race  than 
the  Indians  upon  whose  border  they  trespass;  inasmuch  as  they 
have  been  better  taught,  possess  greater  powers  of  doing  mis- 
chief, and  are  without  principle  .  .  . 

"Men  in  this  semi-savage  state  crave  like  savages  for  spiritous 
liquors.  Ale,  cider  and  wine  are  insipid  to  their  coarse  and 
blunted  sense;  they  are  without  taste,  and  must  have  something 
which  the  palate  can  feel." 

At  this  point  some  parenthetical  remarks  are  necessary. 
Among  the  "lower  classes"  in  England  and  Wales  ale  was  the 
popular  drink,  and  so  widespread  was  the  addiction  that  in 


AN  ONRUSH  OF  CRITICS  97 

1806  there  were  about  50,000  licensed  alehouses  in  England 
and  Wales.  London  alone  made  annually  more  than  68,000,000 
gallons  of  porter,  strong  ale  and  beer,  and  in  that  city  there 
was  one  public  house  or  saloon  to  every  thirty-seven  families. 
In  England  and  Wales  it  was  customary  for  workers  to  spend 
their  leisure  time  in  alehouses.  Whiskey  was  the  general  liquor 
in  Scotland  and  Ireland.  But  England  made  millions  of  gallons 
of  hard  liquors  which  were  shipped  to  all  parts  of  the  world; 
in  London  itself  there  were  sixty-one  distilleries,  and  one  hun- 
dred and  thirty-three  in  the  whole  of  England,  not  to  mention 
illicit  stills.32 

To  resume  "The  Quarterly  Review's"  onslaught  on  Ameri- 
cans: "Intoxication  with  them  is  not  social  hilarity  betrayed 
into  excess;  it  is  too  rapid  a  process  for  that  interval  of  generous 
feeling  which  tempts  the  European  on.  Their  pleasure  is  first 
in  the  fiery  stimulus  itself,  not  in  its  effect — not  in  drunkenness 
but  in  getting  drunk.  .  .  .  Hence  the  ferocity  with  which 
Americans  decide  their  quarrels;  their  rough  and  tumbling; 
their  biting  and  lacerating  each  other;  and  their  gouging,  a 
diabolical  practice  which  has  never  disgraced  Europe,  and  for 
which  no  other  people  have  a  name."  (Where  Weld  had  dis- 
tinctly attributed  gouging  to  the  "lower  classes"  in  taverns,  it 
is  soon  after,  as  we  see,  applied  to  American  settlers  generally.) 

"Living  in  this  semi-savage  state,  the  greater  part  of  the 
American  people  are  so  accustomed  to  dispense  with  the  com- 
forts of  life  which  they  cannot  obtain,  that  they  have  learned 
to  neglect  even  the  decencies  which  are  within  their  reach.  This 
is  not  meant  to  allude  to  the  custom  of  bundling  .  .  .  but  it 
applies  to  the  detestable  state  of  the  inns  which  are  as  disgrace- 
ful to  America  as  they  are  disgusting  to  the  unlucky  European 
whose  fate  it  is  to  travel  there.  .  .  .  His  chamber  is  filled  with 
beds  in  which  men  and  women,  if  women  happen  to  be  traveling, 
lie  promiscuously;  and  when  he  has  fallen  asleep  in  foul  sheets, 
he  may  think  himself  fortunate  if  some  dirty  American  does 
not  awaken  him  by  turning  in  by  his  side.  In  these  beastly 
taverns  the  stranger  must  be  an  unwilling  spectator  of  riot  and 
drunkenness  and  its  bloody  effects.  .  .  .  The  Americans  have 
overrun  an  immense  country,  not  settled  it." 

Here,  apropos  of  the  charge  of  American  incapacity  for  settle- 


98  AMERICA  STRIKES  BACK 

ment,  the  facts  about  the  Sierre  Leone  Company  call  for  inter- 
jection. Composed  of  British  bankers  and  wealthy  merchants, 
this  company,  under  the  pretence  that  it  was  introducing  civi- 
lization in  Africa,  obtained  from  Parliament  grants  of  money 
totaling  £109,000.  In  1807  the  company  was  denounced  in 
Parliament  as  having  failed  in  all  of  its  projects,  and  the  pro- 
posal was  made  that,  accordingly,  it  should  refund  the  sums 
for  which  it  had  produced  no  results.33 

To  return  to  "The  Quarterly  Review";  as  to  the  gambling 
spirit  in  America  it  delivered  this  blast:  "It  is  not  confined  to 
their  speculations  in  land  by  which  so  many  emigrants  have 
been  duped  and  ruined;  it  extends  to  their  commercial  dealings 
and  the  Americans  have  a  worse  character  than  those  of  any 
other  nation." 

Were  this  an  isolated  specimen  it  could  be  allowed  to  remain 
buried.  But  it  was  typical  of  the  scurrility  in  many  British 
publications,  and  it  was  reasserted  in  many  different  ways.  The 
whole,  together  with  the  books  on  America  which  were  widely 
circulated,  made  a  mass  of  opinion  moulding  the  mentality  of 
men  and  women  who,  as  visitors  to  America  in  later  years,  went 
with  jaundiced  preconceptions. 

Meanwhile,  in  America  the  literary  fashion  of  sneering  at 
America's  institutions  and  American  ways  had  established  it- 
self. The  leader  of  this  group  was  Joseph  Dennie,  who  founded 
"The  Portfolio"  (Magazine)  in  1801,  at  Philadelphia.  Dennie 
was  born  in  Boston  in  1768,  but  of  his  life  little  can  be  learned; 
we  have  to  depend  upon  an  oration  delivered  some  time  after 
his  death  at  a  Union  College  Commencement  by  Gulian  C. 
Verplanck,  one  of  the  Regents  of  the  University  of  the  State 
of  New  York,  for  a  description  of  the  influences  that  swayed  him 
and  others,  and  of  the  consequent  effect  upon  many  Americans. 
In  speaking  of  a  danger  that  then  beset  the  American  literary 
man,  Verplanck  said:  "Familiar  with  the  glories  and  beauties 
of  European  literature,  his  ambition  is  early  fixed  to  imitate 
or  to  rival  its  excellence.  He  forms  to  himself  grand  plans  of 
intellectual  exploits,  all  of  them  probably  incongruous  with  the 
state  and  taste  of  his  country,  and  most  of  them  doubtless 
beyond  his  own  ability."  Such  aspiring  souls,  Verplanck  went 


AN  ONRUSH  OF  CRITICS 

on,  discerned  that  the  world  rated  their  talent  very 
from  their  own  estimate  of  it,  or  else  that  the  state  of  society 
about  them  was  wholly  adverse  to  its  exercise  in  the  direction  \ 
and  on  the  scale  their  ambitious  fancy  had  anticipated. 

"Disappointed  and  disgusted,  they  are  now  tempted 
ascribe  their  disappointment  to  the  republican  institutions  of 
their  country.  The  scholar  who  gives  way  to  this  temptation 
dwells  with  a  sort  of  complacent  disgust  at  every  imperfection 
of  our  social  state.  He  gradually  becomes  a  rebel  in  heart  to 
our  glorious  institutions.  His  affections  and  secret  alliance 
transfer  themselves  to  some  other  form  of  government  and  state 
of  society,  such  as  he  dreams  to  have  formed  the  illustrious 
men  and  admirable  things  of  his  favorite  studies. 

"The  early  history  of  American  literature  affords  a  dis- 
tinguished example  of  this  influence  upon  a  most  elegant,  ac- 
complished and  brilliant  mind.  ...  It  is  that  of  one  once  called 
the  American  Addison,  and  still  justly  regarded  as  a  father 
of  our  native  literature,  the  late  Joseph  Dennie.  ...  He  was  a 
genuine  enthusiast  in  his  love  of  literature,  and  he  made  it  the 
business  of  his  life  to  propagate  the  same  taste  among  his 
countrymen.  In  this  he  accomplished  much,  but  he  would  have 
accomplished  very  far  more,  had  he  not  yielded  to  a  strange, 
unwise  and  unhappy  morbid  dislike  for  the  institutions  and 
social  order  of  his  own  country.  This  discolored  his  views  and 
distorted  his  judgment.  .  .  ." 

Dennie  wrote  under  the  pseudonym  of  "Oliver  Oldschool," 
and  the  contributors  to  "The  Portfolio"  were  mainly  anony- 
mous. This  is  an  extract  from  a  typical  article:  "The  bulk  of 
mankind  are  fools.  The  proportion  of  men  of  sense  and  in- 
tegrity to  men  ignorant  and  knavish,  is  perhaps  as  five  to  ninety- 
five.  .  .  .  The  ninety-five  ignoramuses  will  vote  wrong,  and 
thus  constitute  a  powerful  majority.  The  minority  ought  in  all 
cases  to  carry  the  vote."  34  Pronouncements  in  the  Declaration 
of  Independence  of  the  equality  of  men  were  ridiculed,  and 
predictions  made  that  American  democracy  would  soon  de- 
generate into  a  despotism.  Year  after  year  such  attacks  deriding 
every  phase  of  American  life  continued.  Finally,  in  1811,  a 
year  before  Dennie's  death,  a  strong  protest,  in  the  form  of  a 
letter  signed  "The  Stranger  in  New  York,"  was  sent  in  to  "The 


100  AMERICA  STRIKES  BACK 

Portfolio,"  and  somehow  or  other  was  actually  published  in 
that  magazine. 

"The  effect,"  said  the  letter  in  part,  "which  the  misrepre- 
sentations of  European  travelers  have  had  in  degrading  the 
character  of  the  people  of  the  United  States,  is  well  known  to 
you.  A  Weld,  a  Biilow,  a  Janson,  a  Moore,  a  Parkinson,  and 
many  others  have  successively  dipt  their  pens  in  the  gall  of 
malignity  to  revenge  some  slight  neglect,  trifling  incivility  or 
fancied  insult.  They  have  exhausted  the  stores  of  invention  to 
render  the  American  people  ridiculous  and  contemptible;  and 
their  spite  has  even  extended  to  the  abuse  of  their  soil  and 
natural  productions. 

"We  are  told  by  Mr.  Parkinson  (an  illiterate  adventurer) 
that  [American]  civilization  is  retrogressive  and  approaches 
nearer  to  a  Russian  than  an  English  level.  .  .  .  Moore,  the 
poet  .  .  .  informs  us  that  the  [American]  people,  from  the 
form  of  their  government  and  the  influence  of  Republican  senti- 
ments, are  strangers  to  taste,  refinement  and  the  arts  of  imagina- 
tion; are  vulgar,  unsocial,  insolent  and  avaricious.  But  these 
censures  are  perfectly  mild  and  merciful  when  compared  with 
the  animadversions  of  a  Prussian  traveler,  by  the  name  of 
Biilow.  This  arrogant,  illiberal  and  conceited  foreigner  not 
only  pronounces  the  manners  of  the  American  people  rude  and 
ferocious,  but  their  hearts  narrow,  selfish  and  corrupt  to  the 
core.  The  first  settlers  of  America  he  is  pleased  to  denominate 
the  rabble  and  offscourings  of  the  earth,  whose  principles  and 
vices  have  descended  to  their  posterity.  The  American  Revolu- 
tion he  declares  to  have  been  prompted  by  no  generous  or  praise- 
worthy motives,  to  have  been  dignified  by  no  lofty  or  magnani- 
mous feelings,  and  to  have  been  conducted  to  its  termination 
without  ability,  spirit  or  patriotism;  that  science  and  genius 
are  scarcely  to  be  found  in  this  country;  and  that  the  people 
are  a  mean,  groveling,  avaricious  and  barbarous  herd,  without 
sense  or  hospitality. 

"When  such  a  distorted  picture  of  America  is  delineated  by 
the  pencil  of  falsehood,  the  erroneous  impressions  which  prevail 
in  regard  to  the  character  of  its  inhabitants,  must  cease  to  excite 
astonishment.  .  .  ."  35 

Under  a  different  editorial  management  "The  Portfolio" 


AN  ONRUSH  OF  CRITICS  101 

(thereafter  published  in  New  York)  changed  its  attitude.  In  a 
review  of  John  Melish's  "Travels  in  the  United  States  of 
America,  in  the  Years  1806-1811,"  it  said,  in  its  issue  of  Febru- 
ary, 1813 :  "Here  is  a  kind  of  phenomenon.  Two  whole  volumes 
on  America  without  any  material  errors ;  with  no  palpable  false- 
hoods; no  malignant  abuse  of  individuals;  no  paltry  calumnies 
on  the  institutions  of  the  United  States,  Mr.  Melish  has  indeed 
sinned  beyond  forgiveness  against  the  common  law  of  American 
traveling.  He  had  the  good  sense  to  visit  a  large  portion  of  our 
country,  without  quarreling  with  tavern  keepers  or  servants, 
but  has  taken  things  as  he  found  them — made  proper  allowances 
for  the  natural  inconveniences  of  a  young  country — and  been 
treated  with  civility — because  he  knows  how  to  behave  himself 
on  the  road." 

The  effect  of  Dennie's  writings,  according  to  Verplanck,  was 
a  recoil  upon  literature  itself.  Dennie's  course  "identified  in 
the  minds  of  the  unlettered  the  cause  of  elegant  literature  with 
that  of  attachment  to  foreign  principles  and  contempt  for  our 
own."  Verplanck  went  on:  "Honest  men  reasoned,  and  correctly 
too,  though  from  false  premises,  that  if  literature  could  be 
gained  only  at  the  expense  of  patriotic  feeling,  it  is  best  we 
should  go  without  it.  It  lessened,  too,  the  merit  and  value  of  his 
writings  as  literary  compositions;  for  it  tended  to  strip  them 
of  the  original  American  air  they  would  otherwise  have  had, 
and  to  give  them  the  common  cast  of  mere  English  literature. 
Hence,  instead  of  ranking  with  those  of  Irving,  at  the  head  of 
our  literature,  both  in  time  and  merit,  his  works  are  already 
passing  into  oblivion.  .  .  .  Let  the  student  take  warning  from 
his  great  and  single  error."  86 


CHAPTER   X 
IN  THEIR  OWN  LANDS 

IN  none  of  the  books  or  articles  antagonistic  to  America  was 
even  the  bare  suggestion  made  that  in  great  parts  of  Canada 
settlement  conditions  either  paralleled  or  resembled  those  in 
America.  That  Canada  more  or  less  duplicated  such  conditions 
in  its  newly-settled  areas  was  an  obvious  fact.  But  Canada  was 
under  full  British  sovereignty,  governed  by  British  overlords; 
it  held  fast  to  European  institutions,  ideas,  laws  and  ceremonials, 
including  in  all  parts  a  superimposed  official  administration, 
and  in  some  portions  a  distinct  feudal  regime  surviving  in  all 
its  force  from  French  control.  Not  until  1854,  more  than  sixty 
years  after  feudalism  had  been  abolished  in  France,  did  the 
Legislative  Assembly  of  the  Province  of  Quebec  pass  an  act 
opening  the  way  for  the  suppression  of  feudal  tenures  and  duties. 
Critics  from  Europe  were  not  interested,  however,  in  dissecting 
and  condemning  Canadians;  their  quarry  was  Americans.  Yet 
in  Canada  the  newly-settled  regions  showed  all  of  the  rudi- 
mentary stages  common  to  freshly-peopled  countries. 

While  sundry  British  critics  were  so  fiercely  assailing  Ameri- 
can settlement  conditions,  what,  at  the  same  time  and  later, 
was  the  situation  in  Britain's  colonies?  Two  examples  will  be 
instanced.  The  settlement  of  Australia  was  largely  compulsory, 
strictly  regulated  by  the  Colonial  Department  in  London.  In 
Australia  there  were  three  classes  of  settlers:  free  settlers; 
indentured  servants  from  Britain;  and  the  swarms  of  offenders 
convicted,  under  the  hard  British  laws,  of  transgressions  many 
of  which  are  now  recognized  as  nothing  more  than  minor  mis- 
deeds or  misdemeanors.  Degraded  in  England,  few  of  the  in- 
dentured servants  had  ever  been  afforded  the  opportunity  to 
learn  even  to  read  and  write,  and  their  slum  environment  left 
in  them  ineffaceable  characteristics.  In  Australia  many  of  these 

indentured  servants  had,  so  reported  the  supreme  British  of- 

102 


IN  THEIR  OWN  LANDS  103 

ficial  there,  "habits  of  the  lowest  description";  drunkenness 
and  "ir regularities"  were  common.1 

From  Britain  went  a  procession  of  hulks  crowded  promiscu- 
ously with  offenders,  called  convicts  and  sentenced  to  trans- 
portation. Men  and  women,  boys  and  girls,  the  aged  and  infirm 
as  well  as  the  physically  fit,  were  cold-bloodedly  condemned  to 
a  protracted  voyage  and  dumping  in  a  far  distant  land.  On 
the  average  the  direct  voyage  to  Australia  lasted  127  days;  by 
way  of  the  Cape  of  Good  Hope  the  voyage  dragged  over  146 
days.  Salt  pork  and  bread,  the  one  often  unpalatable,  the  other 
often  mouldy,  were  the  rations.  Many  of  the  unfortunates  died 
on  the  way.  A  very  large  proportion  of  the  convicts  were  not 
criminals  in  any  real  sense;  they  were  workers  from  Britain's 
manufacturing  districts  and  the  spawn  of  the  cities,  products 
of  poverty,  driven  more  by  need  than  by  inclination  to  violat- 
ing some  law  or  other.  Callous  to  the  horrible  living  conditions 
of  the  poor,  the  aristocracy  ruling  England,  and  the  judges  en- 
forcing the  laws  made  by  aristocracy,  were  hardened  to  the  fate 
of  the  great  numbers  branded  as  convicts.  These,  once  herded 
in  the  hulks,  were  given  no  further  thought;  such  official  re- 
ports of  their  treatment  both  on  the  voyage  and  in  Australia 
as  were  turned  in  were  made  in  an  unfeeling,  matter-of-fact  way, 
and  were  received  by  official  dignitaries  with  the  same  un- 
concern. 

Totally  unsuited  to  agricultural  labor,  many  of  the  convicts 
were  placed  on  the  large  estates  in  Australia.  The  huts  in  which 
they  were  lodged  were  indescribably  filthy.  Law  did  not  require 
estate  masters  to  furnish  soap,  and  consequently  none  was  sup- 
plied. The  persons  of  the  convicts  were  foul,  a  condition  partly 
caused  by  the  scarcity  of  water  on  many  of  the  estates  and  the 
distance  from  which  it  had  to  be  procured.  Any  infraction  by  a 
convict  brought  upon  him  a  magistrate's  sentence  of  50  to  100 
lashes,  at  times  as  many  as  500  lashes.  Driven  frantic,  many 
convicts  took  to  the  wilds,  became  "bush-rangers"  and  existed 
like  beasts.  Other  convicts  accumulated  in  cities  and  were  sunk 
in  drunkenness,  poverty  and  wretchedness.  Only  a  few,  literate 
and  enterprising,  managed  to  acquire  property,  and  attained 
some  local  office,  as  to  which  latter  development  a  British  in- 
vestigator much  complained.  This  is  not  in  the  least  an  over- 


104  AMERICA  STRIKES  BACK 

drawn  account.  It  is  strictly  consonant  with  the  facts  given  in 
a  comprehensive  report,  on  May  6,  1822,  of  John  Thomas 
Bigge,  Commissioner  of  Inquiry  into  the  State  of  the  Colony 
of  New  South  Wales,  to  Earl  Bathurst,  Secretary  for  War  and 
the  Colonies.2 

While  Australia  was  Britain's  dumping  ground  for  transgres- 
sors, Canada  provided  the  convenient  place  for  shipment  of 
paupers  from  English  and  Irish  parishes.  Having  acquired 
great  areas  of  land  in  Canada,  British  proprietors  were  inter- 
ested in  zealously  promoting  emigration  to  that  country,  as 
also  were  Canadian  high  officials,  many  of  whom  bought  for 
trifling  sums  tracts  each  ranging  from  20,000  and  50,000  to 
100,000  acres  in  Ontario.  In  the  Province  of  Quebec  officials, 
from  the  Governor  down,  obtained  similar  large  tracts  by  grant 
or  purchase.  Nearly  the  whole  of  the  1,400,000  acres  of  Prince 
Edward  Island  was  given  in  a  single  day  to  grantees  mostly 
living  in  Britain:  Lord  Westmoreland,  Sir  James  Montgomery, 
Lord  Selkirk  and  others  were  among  the  beneficiaries.  At  vari- 
ous times  corporations  such  as  the  British  American  Land 
Company  and  the  Canada  Company  obtained  for  a  nominal 
price  millions  of  acres  in  sections  of  Eastern  Canada.  Nearly 
all  of  Canada's  governing  officials  were  deep  in  land  specula- 
tion.3 

Both  voluntary  and  involuntary  immigrants  to  Canada  were 
packed  into  pestilential  ships,  the  noxious  conditions  in  which 
caused  ravages  from  typhus  and  other  diseases.  Testimony 
given  at  the  time  by  immigration  officials  at  the  port  of  Quebec 
showed  the  state  of  swarms  of  newcomers.  On  leaving  England 
voluntary  immigrants  had  a  little  money;  but  the  extortions 
of  ship  captains  robbed  many  of  their  last  shillings,  and  they 
landed  at  Quebec  destitute.4  After  1815  the  arrival  of  both 
voluntary  and  involuntary  and  pauper  immigrants  at  the  port 
of  Quebec  became  greatly  accelerated;  in  the  subsequent  fifteen 
years  the  number  was  168,615.5 

Impoverished  upon  landing,  numbers  drifted  aimlessly  for 
weeks  and  degenerated  into  vagrancy  or  mendicancy.  Others 
with  families  resorted  to  the  large  towns  where  they  eked  a 
paltry  existence  by  day  labor  and  begging.  As  for  such  immi- 
grants as  had  contrived  to  retain  some  money,  they,  according 


IN  THEIR  OWN  LANDS  105 

to  Lord  Durham's  elaborate  report  on  the  state  of  affairs  in 
Canada,  sought  refuge  in  low  taverns  and  squalid  boarding 
houses  or  established  themselves  in  cellars.6  Few  of  the  im- 
migrants had  any  agricultural  experience.  Reporting  on  a  par- 
ticular shipload  of  immigrants,  Sir  James  Kempt  strongly  pro- 
tested against  the  cruelty  of  the  practice  of  relieving  English 
and  Irish  parishes  by  sending  such  hordes  of  paupers  to  a 
distant  colony  and  pitilessly  turning  them  adrift.7  If,  maddened 
by  want,  any  immigrant  turned  to  crime,  he  was  cruelly  pun- 
ished under  merciless  laws  borrowed  from  England.  Laws  in 
Ontario  were  severe  enough,  but  they  were  more  so  in  the 
Province  of  Quebec.  For  petty  larceny,  a  woman's  punish- 
ment was  twenty-five  lashes  on  the  bare  back;  men,  for  the 
same  offence,  often  similarly  received  fifty  lashes.  Even  during 
the  first  decade  of  the  nineteenth  century,  grand  larceny  was 
punished  by  branding  the  palm  of  the  hand  with  a  red-hot  iron. 
The  pillory  was  also  long  a  common  method  of  punishing  of- 
fenders of  all  ages  and  races. 

Following  English  law,  poor  children  in  Nova  Scotia  were 
torn  from  their  parents  and  bound  out  as  apprentices  by  the 
overseers  of  the  poor;  beggars  and  wanderers  were  summarily 
arrested  and  hired  out  for  a  term  not  exceeding  seven  years; 
and  idle  persons  or  tramps  were  treated  as  "rogues  and  vaga- 
bonds," and  imprisoned.  For  even  the  most  trivial  "felonies," 
the  letter  T  was  burned  on  the  offender's  left  thumb;  and  the 
committing  of  the  pettiest  larceny  entailed  a  prison  term  of 
seven  years  at  hard  labor.  Further,  in  Nova  Scotia,  stocks  and 
lashing  were  applied  for  misdemeanors.  In  Montreal  fifty-four 
persons — some  mere  boys — were  hanged  between  the  years 
1812  and  1840  for  various  offences,  only  seven  of  which  in- 
volved murder.  The  majority  of  hangings  were  for  horse,  cattle 
or  sheep  stealing,  robbery  and  burglary.  A  case  is  mentioned 
of  a  boy — B.  Clement — not  quite  fourteen  years  old  who,  in 
1813,  was  hanged  for  stealing  a  cow.8 

One  potent  reason  for  the  slow  settling  of  Canada  was  the 
fact  that,  attracted  by  better  conditions  and  higher  wages  in 
the  United  States,  such  immigrants  as  could  gradually  manage 
to  go  there  availed  themselves  of  the  opportunity.9 

Moreover,  the  great  wild  areas  of  Canada  presented  a  sangui- 


106  AMERICA  STRIKES  BACK 

nary  state  to  which  there  was  not  then  any  parallel  in  America. 
Not  until  some  years  later  did  John  Jacob  Astor's  American 
Fur  Company  begin  to  rival  the  bloody  operations  of  the  fur 
companies  in  Canada.  Competitor  as  it  was  of  the  powerful 
Hudson  Bay  Company,  the  North  West  Company,  composed 
of  Canadians,  was  so  successful  that  many  of  the  men  in  it 
amassed  "great  and  rapid  fortunes,"  as  Lieutenant-Governor 
Milnes,  ranking  British  official  in  Canada,  wrote  in  1802.  He 
reported  how  the  North  West  Company's  opulence  had  led,  in 
1800,  to  the  establishment  of  another  Canadian  fur-trade  com- 
pany, called  the  X.  Y.  Company,  headed  by  Sir  Alexander 
Mackenzie  and  associates.  Between  these  companies,  each  seek- 
ing supremacy  in  more  or  less  the  same  territory,  there  set  in 
a  furious  conflict  in  which  human  life  was  wantonly  sacrificed. 

In  disputes  over  territory  jurisdiction,  employe  often  mur- 
dered employe;  how  many  Indians  were  murdered  was  never 
known — and  no  inquiry  made.  To  outdo  the  other  in  the  effort 
to  secure  the  fur  trade  each  of  the  companies  went  to  the  utter- 
most extremes;  prodigious  quantities  of  rum  were  used  to 
debauch  the  Indians,  and  every  method  was  employed  to  in- 
timidate and  overawe  them.  But  the  richer  and  more  formidable 
of  the  two,  the  North  West  Company,  with  a  force  two-thirds 
larger  than  that  of  the  X.  Y.  Company,  was  able  to  pursue  such 
methods  more  effectively.  Indians  were  incited  to  fire  upon  the 
X.  Y.  Company's  canoes  and  to  pillage  its  goods;  its  employes 
were  often  enticed  by  promises  or  driven  away  by  threats;  and 
its  property  was  destroyed  by  treachery  and  other  underhand 
acts.10 

In  proposing  to  Lord  Hobart  the  establishing  of  courts  of 
justice  in  the  fur-trading  regions  to  deal  with  this  wide  terrorism, 
Milnes  declared  that  both  companies  were  "fearless  of  future 
punishment,  because  they  know  that  the  courts  of  Canada  will 
not  take  cognizance  of  conditions  where  they  traffic."11  One 
of  the  reasons  is  to  be  found  in  the  testimony  of  the  Right  Hon. 
Edward  Ellice.  Gorged  with  wealth  from  the  Hudson  Bay  Com- 
pany, he  stated  before  a  British  Parliamentary  Committee,  in 
1857,  that  when  he  went  to  Canada,  in  1803,  "the  whole  of 
Canadian  society,  every  person  of  eminence  and  consequence 


IN  THEIR  OWN  LANDS  107 

there,  was  then  engaged  in  the  fur-trade,  it  being  the  only  trade 
of  any  consequence  in  that  country."  Cumulative  proof  of 
murders  and  other  crimes  in  outlying  fur-trading  regions  was 
so  great  that  finally,  on  September  10,  1802,  the  Grand  Jury  at 
Montreal  acted,  handing  in  a  strong  presentment  and  demand- 
ing a  remedy.12  For  three  years  more  the  murders — at  least 
those  caused  by  the  companies — continued;  the  merging  of  the 
companies,  in  1805,  put  an  end  to  their  warfare;  but  the  war- 
fare between  the  now  enlarged  North  West  Company  and  the 
Hudson  Bay  Company  went  on  violently. 

Collisions  between  these  companies  kept  increasing,  and  the 
methods  of  both  stirred  bad  feeling  among  the  Indians.  Ellice 
testified  that,  in  1811,  Lord  Selkirk  brought  over  a  shipload  of 
tenants,  founded  a  settlement,  now  Winnipeg,  on  the  Red  River, 
and  joined  the  Hudson  Bay  Company.  According  to  a  remon- 
strance sent  by  Chief  Peguis,  of  the  Saltean  Tribe,  on  the  Red 
River,  to  the  Aborigines  Protection  Society,  London,  Lord 
Selkirk  (whom  the  Indians  named  the  "Silver  Chief")  obtained 
20  to  24  miles  of  the  tribe's  land  along  the  Red  River  by  a 
fraudulent  arrangement.  He  had  represented  that  because  of 
troubles  with  the  North  West  Company  he  could  pay  little 
then,  but  would  return  the  next  year.  Meanwhile,  he  induced 
the  tribe  to  take  some  ammunition  and  tobacco.  Selkirk  never 
returned  and,  the  remonstrance  read  on,  "either  his  son  or  the 
Hudson  Bay  Company  have  ever  since  paid  us  annually  for 
our  lands  only  the  small  quantity  of  ammunition  which,  in  the 
first  instance,  we  took  as  a  preliminary  to  a  final  bargain  about 
our  lands."  Chief  Peguis'  remonstrance  further  declared  that 
for  the  "proprietary  rights"  claimed  by  Selkirk,  the  Hudson 
Bay  Company  had  paid  Selkirk's  executors  £84,111,  and  "now 
claim  all  of  the  lands  between  the  Assiniboin  and  Lake  Winni- 
peg, a  quantity  of  land  nearly  double  of  what  was  first  asked 
from  us."  13 

In  the  conflicts  between  the  Hudson  Bay  Company  and  the 
North  West  Company,  an  action  on  the  Red  River,  in  1815, 
between  their  armed  forces,  resulted  in  the  killing  of  sixteen 
men.  Accusing  William  M'Gillivray,  principal  partner  in  the 
North  West  Company,  of  having  instigated  the  trouble,  Selkirk 


108  AMERICA  STRIKES  BACK 

seized  both  him  and  his  property,  and  other  North  West  Com- 
pany magnates  were  arrested.  M'Gillivray  made  counter 
charges.  Powerful  as  was  the  Hudson  Bay  Company  in  Eng- 
land, the  North  West  Company  was  all  powerful  in  Montreal. 
Its  members  almost  completely  controlled  the  acts  of  the  Gov- 
ernment and  the  Governor  in  Council,  and  finally  secured  ac- 
quittal of  its  men.  The  well-known  Judge  Reid,  says  a  Canadian 
historian,  had  married  M'Gillivray 's  sister,  "and  this  mighty 
influence  had  something  to  do  with  the  final  issue."  14 

The  inflammatory  effect  upon  the  Indian  tribes  of  the  war 
between  the  fur-trading  companies  was  luridly  related  in  Ellice's 
testimony.  "Rum,"  he  testified,  "was  given  to  the  various  parties 
acting  in  competition,  to  the  Indians  and  half-breeds;  the  whole 
country  was  demoralized;  the  Indian  tribes  were  in  conflict, 
one  against  the  other.  In  fact,  whatever  a  particular  trader 
carrying  on  his  business  at  a  particular  post  thought  was  likely 
to  ruin  his  competitor  and  advance  his  own  interests  was  done 
without  the  least  regard  to  morality  and  humanity."  During 
this  very  time  the  Hudson  Bay  Company  was  boasting  that  its 
missionaries  were  "civilizing  the  heathen."  Ellice  blamed  the 
American  traders  for  the  necessity  of  using  rum;  in  the  con- 
tests about  trading  posts  on  the  frontier,  he  said,  "the  universal 
article  used  to  corrupt  the  Indians  is  spirits."  15  In  turn,  the 
United  States  Government  was  making  indignant  remonstrances, 
charging  the  companies  in  Canada  with  responsibility  for  the 
rum  traffic  in  the  fur  trade. 

Both  the  Hudson  Bay  Company  and  the  North  West  Com- 
pany finally  concluded  that  warfare  between  them  was  too 
costly.  Ellice  testified  that  it  was  he  who  in  1819  or  1820  suc- 
ceeded in  merging  the  companies,  which  thereafter  figured  as 
the  Hudson  Bay  Company. 

Two  notable  incidents  accompanied  this  merger.  Contrary 
to  its  previous  claims,  the  Hudson  Bay  Company  now  held  that 
its  territory  extended  west  of  the  Rocky  Mountains.  The  other 
incident  was  the  further  inflation  of  the  company's  capital  stock, 
and  later  there  came  still  more  inflation.  Apart  from  the  great, 
continuing  profits  of  the  Hudson  Bay  Company,  those  of  the 
North  West  Company  created  large  fortunes  which  later  were 
conspicuous  in  Canadian  banks,  steamship  and  railroad  lines. 


IN  THEIR  OWN  LANDS  109 

While  British  critics,  neglectful  of  the  scope  awaiting  their 
talents  in  Australia  and  Canada,  were  assailing  Americans  as 
a  money-seeking  people,  what  was  the  state  of  trade  in  their 
home  land? 

There  high  British  officials  were  boasting  of  Britain's  extent 
of  commerce  and  wealth,  and  were  lauding  the  integrity  of  its 
merchants  as  the  great  reason  why  its  manufactures  had  pros- 
pered. Sentiments  expressed  in  a  debate  in  the  House  of  Com- 
mons, on  March  5,  1802,  were  an  example  of  this  insular  satis- 
faction. Henry  Addington,  then  Premier  and  Chancellor  of  the 
Exchequer — soon  to  become  Viscount  Sidmouth — enthusiasti- 
cally declared  Britain  "happily  a  splendid  instance"  of  the 
"uniting  of  military  excellence  with  superior  wealth."  Britain's 
success  in  attaining  both,  he  argued,  proved  how  false  was  the 
supposition  of  their  incompatibility.  On  the  same  day,  Lord 
Hawkesbury  extolled  the  sway  of  British  money.  "In  capital, 
Great  Britain  is  rivaled  by  no  country,  but  still  more  im- 
portant," he  went  on  solemnly,  "is  the  confidence  to  which  the 
honor  and  punctuality  of  her  merchants  entitle  her.  The  only 
country  which  has  been  able  to  rival  us  is  Holland,  who  founded 
her  commerce  upon  a  similar  honesty  and  punctuality.  But 
France  has  never  been  able  to  rival  us  because  the  French 
character  is  not  honest,  just  and  punctual."  16 

Neither  then  nor  for  decades  later  did  any  important  mem- 
ber of  Parliament  lay  himself  open  to  the  charge  of  impropriety 
by  even  mentioning  the  conditions  under  which  children  were 
employed.  Underpaid  and  driven  labor  was  the  basis  of  Britain's 
ability  to  manufacture  cheaply.  But  by  general  tacit  consent 
among  members  of  Parliament,  this  was  a  barred  subject. 

Meanwhile,  the  example  of  British  manufacturers  in  fast 
acquiring  fortunes  had  made  a  deep  impression  upon  American 
promoters.  A  meeting  of  a  group  proposing  to  establish  woolen, 
cotton  and  linen  factories  was  held  on  March  16,  1775,  in 
Carpenter's  Hall,  Philadelphia.  The  chief  speaker  described 
Great  Britain's  factories  "as  the  foundation  of  her  riches  and 
power.  They  have  made  her  merchants  nobles  and  her  nobles 
princes."  Some  manufacturing  work,  he  said,  could  be  done  in 
the  homes  of  the  poor,  but  the  age  of  machinery  had  arrived, 
and  factory  buildings  were  necessary.  The  American  colonies, 


110  AMERICA  STRIKES  BACK 

he  further  said,  were  largely  of  an  agricultural  character,  but 
in  England  the  greater  number  of  "hands"  had  been  taken  from 
the  plow  for  factory  service.  The  speaker  urged  the  need  of 
imitating  the  English  system  of  employing  women  and  children. 

"A  strong  objection  to  factories  in  America,"  he  acknowl- 
edged, "is  that  we  cannot  manufacture  cloths  so  cheap  as  they 
can  be  imported  from  Britain.  It  has  been  the  misfortune  of 
most  of  the  manufactories  which  have  been  set  up  in  this  coun- 
try to  afford  labor  to  journeymen  only  for  six  or  nine  months 
in  the  year,  by  which  means  their  wages  have  necessarily  been 
so  high  as  to  support  them  in  intervals  of  labor.  .  .  .  The  ex- 
pense of  manufacturing  cloth  [in  America]  will  be  lessened 
from  the  great  share  women  and  children  have  in  them."  Then 
the  speaker  argued  in  a  humanitarian  tone:  Although,  because 
of  unwholesome  diet,  damp  houses  and  other  bad  conditions, 
diseases  were  prevalent  among  British  factory  workers,  such 
distressing  results  could  be  prevented  in  America  by  taking  care 
to  supply  good  living  and  factory  accommodations.17 

When,  in  1791,  Samuel  Slater  established  a  cotton  mill  at 
Providence,  Rhode  Island,  he  imitated  the  English  custom  of 
employing  whole  families,  including  very  young  children.  This 
system  led  to  the  migration  of  families  from  country  districts 
to  the  city  where  they  were  wholly  dependent  upon  the  mill; 
when  work  was  lacking,  severe  suffering  ensued.18  But  factories 
then  and  for  years  later  were  rarities  in  America.  Commend- 
ing the  introduction  of  labor-saving  machinery,  a  leading  Ameri- 
can publication  stated  in  1789  and  1792  that  one  great  objec- 
tion to  manufacturing  in  America  was  the  high  price  of  labor. 
Another  obstacle  was  the  absence  of  hereditary  class  formations, 
fixing  the  station  of  laborers.  "Mechanics  in  America  are  of  as 
much  consequence  as  the  farmers  themselves.  ...  In  England 
there  is  more  difference  between  man  and  man  than  there  is  here 
between  man  and  beast."  Often  the  American  mechanic,  it  was 
further  pointed  out,  desired  to  educate  his  son  in  the  law, 
medicine  or  other  professions,  and  there  were  no  caste  barriers 
to  interfere  with  his  so  doing.19 

How  sparse  America  was  in  factories  was  shown  by  the  report 
of  Alexander  Hamilton,  Secretary  of  the  Treasury,  in  1792,  on 
manufactures  in  America.  "It  is  computed  in  a  number  of 


IN  THEIR  OWN  LANDS  111 

districts,"  he  wrote,  "that  two-thirds,  three-fourths  and  even 
four-fifths  of  all  the  clothing  of  the  inhabitants  are  made  by 
themselves."  His  report  then  dealt  with  the  efficiency  of  British 
cotton  mills.  Run  by  water  power,  they  were  "attended  chiefly 
by  women  and  children,  night  and  day."  Hamilton  pleaded  the 
necessity  of  woman  and  child  labor  to  operate  the  factories  to 
be  established  in  America.  "Of  the  number  employed  in  the 
cotton  manufactories  of  Great  Britain,"  Hamilton's  report  went 
on,  "it  is  computed  that  four-sevenths  nearly  are  women  and 
children,  and  many  of  them  of  a  tender  age."  Machinery  would 
counteract  the  high  price  of  labor  in  America,  Hamilton  argued, 
and  equality  of  religious  rights  would  promote  immigration. 
Many  who  came  to  America  to  go  into  factories  would,  he 
thought,  go  into  agricultural  pursuits. 

The  phenomenally  swift  advance  both  of  industrialism  and 
commercialism  in  Britain  caused  consternation  among  the 
landed  gentry  there.  Long  accustomed  to  the  system  of  political 
power  based  upon  land  ownership,  they  were  intensely  alarmed 
by  the  encroachments  of  other  groups  whose  rising  economic 
power  imminently  threatened  a  corresponding  shift  of  political 
sway.  The  gentry,  therefore,  now  roused  themselves  to  vigorous 
efforts  to  defeat  any  change  in  the  electoral  system.  Scandalous 
as  that  system  was,  they  took  the  ground  that  it  was  venerable, 
traditional,  and  therefore  should  not  be  disturbed. 

The  gentry's  stand  was  frankly  demonstrated  when,  in  1793, 
petitions  demanding  reforms  in  the  method  of  electing  its  mem- 
bers were  submitted  to  Parliament.  The  majority  of  the  House 
of  Commons,  the  appeals  set  forth,  was  elected  by  less  than 
15,000  electors  out  of  at  least  3,000,000  male  adults  in  the 
United  Kingdom.20  One  of  the  petitions,  that  of  the  "Friends  of 
the  People,"  denounced  the  "progressive  degree  of  fraud  and 
corruption"  by  which,  for  an  expenditure  of  from  £3,000  to 
£6,000,  men  could  get  themselves  elected  to  Parliament.  Con- 
trolling the  election  districts,  termed  boroughs,  there  were 
regular  manipulators  called  "borough  jobbers"  or  "borough 
mongers,"  disclosures  as  to  the  evil  operations  of  which  were 
brought  out  in  the  debate. 

Bitter  complaints  were  made  by  the  landed  gentry  of  the 
incursion  into  Parliament  of  men  with  nothing  more  to  recom- 


112  AMERICA  STRIKES  BACK 

mend  them  than  a  commercial  stamp.  Corrupt  previously,  the 
election  system  was  no  more  corrupt  when  men  who  had  amassed 
wealth  in  the  East  and  in  the  West  India  trade  scrambled  for 
seats  in  Parliament.  The  only  difference  was  a  big  increase  in 
the  prices  demanded.  Having  fixed  incomes,  the  gentry  could 
not  compete  with  a  set  of  men  to  whom  the  object  was  every- 
thing and  the  cost  a  minor  item.  And  so  uprose  Sir  William 
Young  with  his  candidly-stated  reason  why  the  system  in  force 
was  the  only  salvation  for  men  of  landed  estates.  "I  will  repeat," 
he  said,  "that  boroughs  bought  and  controlled  by  men  of 
[landed]  property  forms  the  only  balance  to  the  commercial 
influence  which  is  increasing  by  too  rapid  strides  and  ought 
to  be  checked."  21 

The  thundering  of  a  few  members  against  venality  had  no 
effect  upon  the  swarm  of  immovable  men  of  landed  estates  in 
Parliament.  Election  of  members,  declared  Richard  Brinsley 
Sheridan,  was  a  farce.  "Corruption,"  he  brusquely  told  his 
colleagues,  "is  the  pivot  on  which  the  whole  of  our  public  gov- 
ernment turns;  the  collection  of  taxes  is  under  the  direction 
of  wealthy  men  in  Parliamentary  interest.  The  consequence  is 
that  the  collection  of  them  is  neglected;  to  make  up  the  de- 
ficiency excisemen  must  be  added  to  the  excise — this  sours  the 
temper  of  the  people."  Sheridan  told  how  the  Premier  in  power 
had  metamorphosed  into  peers  a  hundred  men  "who  had  never 
rendered  the  least  service  to  the  public  in  any  action  of  their 
lives — but  merely  on  account  of  their  Parliamentary  in- 
fluence." 22  By  a  vote  of  282  to  41  the  House  of  Commons  over- 
whelmed electoral  reform. 

Seeking  to  impress  upon  his  fellow  members  "the  general 
feeling  in  Britain  of  the  corruption  in  the  House  of  Commons," 
and  with  pertinent  remarks  upon  men  who  "had  grown  rich 
upon  public  money,"  Lord  Cochrane,  in  1807,  introduced  a  most 
displeasing  resolution.  It  called  for  an  inquiry  into  places, 
sinecures,  emoluments  and  pensions  held  by  members  of  Parlia- 
ment. By  a  decisive  majority  the  House  expeditiously  voted 
down  the  resolution.23 

It  was  probably  this  incident  which  caused  "The  Quarterly 
Review,"  for  decades  a  venomous  condemner  of  American 
venality,  to  indulge  in  a  homily  on  Parliamentary  corruption. 


IN  THEIR  OWN  LANDS  113 

"Parliaments,"  it  explained  in  May,  1809,  "are  seldom,  very 
seldom  bribed  to  injure  their  country,  because  it  is  seldom 
the  interest  of  ministers  to  injure  it;  but  the  great  source  of 
corruption  is  that  they  will  not  serve  it  for  nothing.  Men  get 
into  Parliament  in  pursuit  of  power,  honors  and  preferment, 
and  until  they  obtain  them,  determine  to  obstruct  all  business 
and  distress  government." 

At  this  period  the  East  India  Company  stood  forth  as  the 
greatest  single  example  of  British  commercialism.  In  1793  it 
was  looked  upon  as  a  colossus  with  its  81,000  tons  of  shipping 
manned  by  7,000  men.  Its  operations,  power  and  revenues  were 
viewed  in  Britain  with  mingled  awe  and  admiration.  Yearly  it 
exported  more  than  £1,500,000  of  British  products  to  India 
and  China.  Fortunes  acquired  by  British  individuals  connected 
with  it  in  India  amounted  to  an  aggregate  of  at  least  £1,000,000 
a  year.  The  wealth  thus  drenching  England — or  at  least  a  con- 
siderable range  of  beneficiaries — gave  the  company  command- 
ing prestige  and  power  there.  In  India  it  dominated  governors, 
councilors,  judges,  generals  and  chiefs  of  provinces.  From  Bengal 
alone  the  company  or  its  agents  had  extracted,  it  was  computed, 
a  total  of  £150,000,000.24 

In  1796  the  Emperor  of  China  interdicted  the  importation 
and  use  of  opium;  smuggling  was  severely  punishable,  and 
persons  found  guilty  of  smoking  the  narcotic  were  liable  to  be- 
heading. Notwithstanding  this  decree,  the  East  India  Company 
found  ways  of  pouring  into  China  great  quantities  of  opium.  In 
the  north  of  India  a  whole  province,  under  the  company's  direc- 
tion, was  purple  with  poppy  fields.  Protests  by  China's  Govern- 
ment against  systematic  opium  smuggling  were  fruitless.  The 
East  India  Company's  revenues  expanded.  In  the  four  years 
1799-1802  it  made  (excluding  profits  from  spices  and  some 
other  goods),  a  total  profit  of  £6,220,229,  of  which  (to  be 
further  exact),  it  distributed  £2,841,644  in  dividends.  More- 
over, so  well  was  the  company  fortified  with  cash  that  it  proudly 
announced  its  annual  surplus  as  more  than  £237,000,  and  with 
triumphant  self-approval  pointed  to  its  total  surplus,  in  the 
four  years,  of  £1,349,125.25 

In  a  broader  aspect,  British  sentiment  was  jubilant  over  the 
mounting  value  of  British  exports.  During  the  successive  Na- 


114  AMERICA  STRIKES  BACK 

poleonic  wars  human  life  was  vastly  sacrificed,  and  govern- 
ing classes  did  not  relent.  But  in  Britain  industrialism  rejoiced 
at  seeing  exports  from  England  and  Scotland  rise  from  £22,- 
000,000  in  1803  to  more  than  £25,000,000  in  1805.  Above  the 
conflicts  of  sea  and  land  was  heard  the  prosperity  chant  of  the 
woolen  manufacturers — who  exported  in  those  years  an  average 
of  £5,550,000  of  woolen  goods — and  likewise  of  the  cotton 
manufacturers,  with  their  showing  of  an  annual  average  export 
of  £6,000,000  of  their  cloths.  Wrought  iron  manufacturers  did 
exceedingly  well  with  their  average  annual  exports  of  £900,000; 
and  the  proprietors  of  cotton  yarn,  hardware,  hat,  stocking, 
silk,  apparel,  wrought  brass  and  many  other  factories  all  were 
suffused  by  an  overweening  sense  of  deserved  good  fortune.26 

Women  and  poor  or  pauper  child  toilers  were  pitilessly  over- 
worked in  foul  factories ;  miserable  wages  doomed  them  to  semi- 
starvation.  Disease  epidemics  in  the  factory  districts  of  Man- 
chester caused  widespread  agitation  for  a  regulatory  factory 
law,  which  Parliament  was  goaded  into  passing  in  1802.  This 
law  prescribed  the  remedy  of  ordering  all  factory  walls  white- 
washed— the  legislature  imagining  that  this  application  would 
prevent  further  disease.  No  corrective  recognition  was  given  to 
the  fearful  slums  in  which  workers  existed. 

The  census  returns  of  neither  Great  Britain  nor  the  United 
States  in  the  first  decades  of  the  nineteenth  century  gave  any 
information  as  to  the  number  of  factories.  But  how  greatly 
England  had  transformed  itself  from  an  agricultural  to  a  manu- 
facturing nation  was  shown  by  the  British  census  of  1800.  Of 
a  total  population  of  8,331,434  in  England,  1,524,227  persons 
were  chiefly  employed  in  agriculture,  and  1,789,531  chiefly  in 
trade,  manufacture  or  handicraft.  Of  this  latter  classification, 
595,707  were  concentrated  in  the  industrial  districts  of  Lanca- 
shire, York  and  Middlesex.27 

In  the  next  decade  or  so  the  wide  introduction  of  steam- 
operated  machinery  in  England  brought  an  enormous  extension 
of  trade.  The  outcome  of  the  Napoleonic  wars  left  Britain  in 
command  of  the  seas — a  supremacy  which  was  effectively  chal- 
lenged by  America  alone.  But  at  that  time  the  British,  with 
greater  experience  and  better  shipyards,  were  able  to  produce 
more  and  often  superior  ships,  and  the  British  held  a  monopoly 


IN  THEIR  OWN  LANDS  115 

of  the  East  India,  and  a  firm  grip  on  the  West  India,  trade. 
In  Lancashire  handlooms  were  rapidly  supplanted  by  machines. 
Manufacturers  procured  additional  needed  labor  by  turning  to 
child- traffickers.  These  provided  great  numbers  of  workhouse 
pauper  children  who  often  were  compelled  to  toil  sixteen  hours 
a  day  in  the  factories.  It  was  not  until  1819  that  Parliament 
passed  an  act  forbidding  employment  in  the  cotton  mills  to 
children  under  nine  years  old,  and  fixing  the  hours  of  employ- 
ment of  those  from  that  age  to  sixteen  years  at  not  more  than 
twelve  a  day.  The  story  of  laborers'  riots  to  destroy  machines 
in  Nottingham  in  1812  and  1813-1814,  and  in  Lancashire  later 
is  not  unfamiliar.28 

As  yet  few  factories  had  arisen  in  America.  Shoe-making 
establishments  started  at  Lynn  and  Haverhill,  Mass.,  in  1812, 
were  only  rudiments  of  factories.  The  manufacturers  cut  the 
stock,  and  then  distributed  it  to  be  made  up  in  little  country 
shops  where  the  wives  and  daughters  stitched  the  uppers.  This 
system  lasted  until  the  invention  in  1859  of  the  Blake  sole- 
sewing  machine,  and  soon  thereafter  of  the  McKay  shoe 
stitcher.  The  system  of  complete  manufacture  in  the  factory 
was  not  well  developed  until  1870.  Building  of  the  Lowell, 
Mass.,  cotton  factories  dated  from  1821  when  a  farm  site  was 
bought,  and  erection  was  begun  on  it  the  next  year. 

The  landed  estate  and  agricultural  interests,  which  politically 
ruled  America,  looked  with  apprehension  upon  the  prospects  of 
industrialism  supplanting  them  in  power.  One  of  many  examples 
of  the  expression  of  this  dread  occurred  in  the  New  York  State 
Constitutional  Convention  of  1821.  New  York  City  then  had 
123,000  population,  a  small  part  of  that  of  the  entire  State. 
"At  present/'  Chief  Justice  Spencer,  a  spokesman  for  the  land 
interest,  declared,  "the  agricultural  interest  predominates;  but 
who  can  foresee  that  in  process  of  time  it  will  not  become  the 
minor  body?"  Chancellor  Kent  argued  for  a  measure  to  ensure 
political  power  to  men  of  landed  property;  he  voiced  his  fear 
of  the  evils  produced  by  a  commercial  and  manufacturing  popu- 
lation with  the  ensuing  "wealth  and  luxuries,  and  the  vices  and 
miseries  they  engender."  He  pointed  as  an  example  to  Paris, 
where  one-seventh  of  the  population  subsisted  on  charity.29 

One  of  the  strangest  aspects  of  criticism  of  America  by  the 


116  AMERICA  STRIKES  BACK 

British  was  that,  while  accusing  Americans  of  money-seeking, 
they  at  the  same  time  reproached  America  for  its  paucity  of 
manufactures.  Naturally  enough,  these  critics  linked  the  de- 
velopment of  arts  and  sciences  with  factories.  Rude  and  rural 
America,  they  declared,  accordingly,  could  offer  little  in  the 
artistic  and  scientific  fields.30 

Frauds  in  the  manufacture  and  sale  of  goods  still  went  on  in 
Britain.  Evidence  before  Parliamentary  committees  investigat- 
ing the  woolen  trade  showed  that,  in  1803  and  1821,  manufac- 
turers were  making  weavers  use  their  homes  as  what  we  now 
call  "sweatshops."  In  these  the  weavers  worked  fourteen  to 
sixteen  hours  a  day.  When  weavers  tried  to  organize  to  better 
their  lot  they  were  arrested  and  convicted  of  criminal  con- 
spiracy. On  the  other  hand,  woolen  manufacturers  were  using 
the  stamping  laws  merely  as  a  cloak  for  fraudulent  representa- 
tion of  their  wares,  and  they  concealed  defects  in  damaged 
cloths  by  the  device  of  flocks  and  fine  drawing.31  The  decay  of 
the  framework  knitters  trade,  Parliamentary  reports  stated,  was 
attributed  to  the  practice  of  making  bad  and  fraudulent  goods ; 
and  fraud  was  practiced  in  the  making  of  Nottingham  lace.32 
Spurious  worsted  stockings  were  made  and  sold.33  In  the  manu- 
facture of  watches  and  jewelry  base  metal  was  used  both  in 
England  and  in  some  other  European  countries;  good  watch- 
makers' names  were  pirated  and  stamped  on  watches  and 
clocks;  quantities  of  such  inferior  watches  were  smuggled  into 
England,  and  then,  together  with  fraudulent  jewelry,  exported 
by  the  British  traders  to  North  America  for  use  in  barter  with 
the  Indians  for  furs.34  Continued  frauds  in  the  making  of  cut- 
lery were  complained  of  by  good  cutlers,  and  finally  caused 
official  inquiry  into  the  imitative  manufacture  of  edge  tools.35 
There  were  long-lasting  frauds  in  other  lines  of  British  manu- 
facture. 

Rich  as  well  as  poor  were  grossly  imposed  upon  by  fraudulent 
measurement  and  selling  of  coal.  The  great  majority  of  bakers' 
shops  were  owned  by  the  millers;  cheap  bakers  used  only  in- 
ferior flour,  adulterating  it  to  give  it  whiteness.  To  shield  them- 
selves from  prosecution  for  selling  bread  shortweight,  bakers 
frequently  paid  informers  a  stated  sum  weekly  not  to  cause 


IN  THEIR  OWN  LANDS  117 

molestation.36  Selling  of  bad  butter  and  other  deleterious  foods 
was  common. 

From  every  quarter  of  the  globe  profits  flowed  profusely  into 
Britain.  Its  export  trade,  mainly  of  manufactures,  was,  from 
1810  to  1820,  treble  that  of  the  United  States,  the  goods  shipped 
from  which  were  largely  produce,  chiefly  raw  cotton.  During 
this  decade  the  annual  average  value  of  Britain's  exports  was 
upwards  of  £36,000,000.37 

Multimillionaire  fortunes  (in  pounds)  of  an  array  of  Britain's 
nobility  came  from  the  cumulatively  stupendous  increase  in  the 
value  of  their  ancestral  lands  affected  by  this  notable  industrial 
development.  In  large  measure,  the  great  wealth  of  the  Marquis 
of  Bute  was  the  result  of  the  industrial  growth  of  Cardiff  on 
his  ancestral  estate.  Much  of  the  huge  wealth  of  the  Duke  of 
Devonshire  came  from  the  expansion  of  towns  on  or  near  his 
estates  in  Yorkshire,  Lancashire  and  Sussex.  Sheffield's  steel 
industries  brought  great  wealth  to  the  land-owning  Duke  of 
Norfolk.  Owning  estates  in  the  vicinity  of  Liverpool,  the  Earl  of 
Derby  lavishly  benefited  from  the  vast  rise  in  the  value  of  his 
lands.  "And  so,"  went  on  an  account  in  a  British  magazine, 
"through  the  ranks  of  the  richest  of  the  aristocracy  may  be 
traced  the  direct  influence  of  modern  industrial  development  in 
the  augmentation  of  their  fortunes.  The  new  industrial  men 
have  made  the  lords  of  the  old  hereditary  acres  what  they 
are." 38 


CHAPTER   XI 
AND  STILL  NO  CHANGE 

NOT  infrequently  it  is  the  unconscious  mission  of  an  era  to 
provide  hilarity  to  later  generations.  Things  said  in  all  serious- 
ness, judgments  austerely  made,  predictions  confidently  put 
forth,  are  transmuted  by  Time  into  subjects  for  mirth.  "Litera- 
ture the  Americans  have  none — no  native  literature  we  mean. 
It  is  all  imported.  They  had  a  Franklin,  indeed,  and  may  afford 
to  live  half  a  century  on  his  fame.  .  .  .  But  why  should  the 
Americans  write  books  when  a  six- weeks'  passage  brings  them 
in  their  own  tongue  our  sense,  science  and  genius,  in  bales  and 
hogsheads?  Prairies,  steamboats,  grist  mills  are  their  natural 
objects  for  centuries  to  come.  .  .  ."  Thus  did  "The  Edinburgh 
Review"  relieve  itself,  in  December,  1818,  in  a  joint  review  of 
Bradbury's,  Palmer's,  and  some  other  books. 

In  addition  to  their  sense,  science  and  genius  the  British 
should  have  credited  themselves  with  immunity  to  the  paralyz- 
ing effects  of  monotony.  For  the  riot  of  disparaging  books  on 
America  continued,  and  each  in  turn  was  joyously  lapped  up. 
John  Bristed's  volume  was  one  more  of  the  many  indictments. 
He  made  a  special  point  of  drawing  an  affrighting  picture  of 
American  recalcitration.  "Strictly  speaking,"  his  book  ran  on, 
"there  is  no  such  thing  as  social  subordination  in  the  United 
States.  Parents  have  no  command  over  their  children,  nor 
teachers  over  their  scholars,  nor  lawyers  nor  physicians  over 
their  pupils,  nor  farmers  over  their  laborers,  nor  merchants  over 
their  clerks,  carmen  or  porters,  nor  masters  over  their  servants. 
All  are  equal,  all  do  as  they  list,  and  all  are  free  not  to  work, 
except  the  master,  who  must  himself  be  a  slave  if  he  means 
his  business  to  prosper,  for  he  has  no  control  over  any  other 
head,  eyes  or  hands  than  his  own.  ..." 

This  was  precisely  the  kind  of  matter  the  British  upper 
classes  wanted  as  proof  that  their  power  of  abusing  and  other- 

118 


AND  STILL  NO  CHANGE  119 

wise  disciplining  menials  was  the  only  treatment  conducing 
to  social  order  and  stability.  All  of  Bristed's  assertions  were, 
of  course,  foolish  when  not  ludicrous.  But  they  were  believed 
in  England.  The  strange  feature  of  Bristed's  representation 
of  American  employers'  helplessness  was  that,  at  this  very 
period,  employers  in  America  were  invoking  the  terrors  of  old 
English  law  to  tyrannize  over  their  workers.  It  was  by  the 
force  of  this  transplanted  law,  supposed  to  have  been  incor- 
porated in  American  common  law,  that  American  factory  and 
other  industrial  owners,  while  themselves  organized  in  associa- 
tions, sought  to  crush  every  effort  of  workers  to  organize  for 
better  wages  and  shorter  work  hours.  Falling  back  upon  prec- 
edents of  English  law,  American  judges  outlawed  workers7 
organizations  as  criminal  conspiracies,  and  labor  union  organ- 
izers were  often  fined  or  imprisoned.  Not  until  nearly  the  mid- 
nineteenth  century  was  the  first  successful  effort  made  in 
America  to  efface  the  incubus  of  this  old  law.  At  the  instigation 
of  Massachusetts  boot  and  shoe  manufacturers,  Boston  officials 
brought  an  action  against  the  Boston  Journeymen  Bootmakers' 
Society,  on  the  ground  that  it  was  a  conspiracy.  The  lower  court 
ruled  against  the  union,  and  the  jury  returned  a  verdict  of 
guilty.  But  on  an  appeal  in  the  Supreme  Court  of  Massachusetts, 
Robert  Rantoul,  by  an  able  plea,  caused  reversal  of  the  verdict. 
The  law  of  Queen  Elizabeth's  time  making  a  criminal  offence 
of  the  refusal  to  work  for  certain  wages  had  not  been,  he  argued, 
specifically  adopted  as  common  law  in  the  United  States  after 
the  Revolution.1  The  lingering  influence  of  this  Elizabethan 
statute  was  not  obliterated  from  American  jurisprudence  until 
almost  1880. 

At  the  time  of  Bristed's  sojourn  in  America,  general — then 
styled  "universal" — suffrage  did  not  exist  in  the  United  States. 
Only  men  owning  land  voted,  and  only  those  having  prescribed 
amounts  of  property  could  be  elected  to  high  offices  in  various 
States.  Manhood  suffrage  did  not  make  its  advent  until  1821- 
1828.  But  even  the  American  qualified  voting  system,  necessitat- 
ing, as  it  did,  a  genuine  and  popular  appeal  to  a  partial  think- 
ing electorate,  upset  Bristed  and  other  British  critics.  They 
were  accustomed  to  their  own  smug,  compact,  easily  manipulated 
system.2  The  idea  that  "universal"  suffrage  led  to  tumults  was 


120  AMERICA  STRIKES  BACK 

widespread  in  Britain,8  and  Bristed's  book  catered  to  that 
fashionable  view. 

Popular  election  of  judges  in  America,  he  wrote,  resulted  in 
grievously  encouraging  litigation  among  the  poorer  classes,  and 
"a  horrible  perversion  of  justice  corrupts  die  whole  body  of 
the  commonwealth."  As  a  matter  of  fact,  recourse  to  law  in 
America  was  easily  had,  while  in  Britain  it  was  one  of  the  most 
expensive  of  things.  In  England  the  winning  of  the  most  trivial 
cause  in  court  cost  £40,  and  so  much  more  costly  was  suit  in 
the  Court  of  Equity  that  it  was  better  to  abandon  claim  for 
£500  to  £1,000  than  to  contend  in  an  action.  Bristed  described 
American  laws  generally  as  favoring  the  debtor  at  the  expense 
of  the  creditor,  and  thereby  encouraging  dishonesty.  Only  a  few 
months  after  Bristed's  book  was  published,  a  House  of  Com- 
mons Select  Committee,  submitting  its  report  on  Britain's 
bankruptcy  laws,  specified  various  phases  of  those  laws  of 
which,  it  stated,  the  public  had  good  cause  to  complain.  One 
phase  was  "the  ease  with  which  undeserving  and  even  dishonest 
bankrupts  obtain  their  certificates  [of  discharge  from  debt], 
and  the  total  absence  of  all  discrimination  between  culpability 
and  misfortune."  Under  an  old  law  any  bankrupt  concealing 
assets  to  the  amount  of  £20  was  still  punishable  by  death — a 
law  so  repugnant  that  in  eighty- three  years  the  British  courts 
could  bring  themselves  to  sentence  only  three  bankrupts  to 
execution.4 

"It  requires  no  prophetic  inspiration,"  Bristed  oracularly 
concluded  as  to  America's  fate,  "to  foretell  the  rapid  dissolu- 
tion of  a  government  planted  in  the  soil  of  universal  suffrage, 
when  once  its  electors  have  become  deaf  to  the  calls  of  duty, 
and  when  the  mere  sale  of  their  votes  to  the  highest  bidder  may 
be  considered  as  one  of  the  least  dark  in  the  long  catalogue  of 
their  crimes."  Seeing  in  America  a  complete  absence  of  that 
alliance  of  Church  and  State  common  in  Europe,  Bristed  de- 
cided that  Americans  had  "little  religious  feeling."  And  among 
a  list  of  other  charges  against  Americans  he  made  this  pro- 
nouncement: "The  national  vanity  of  the  United  States  sur- 
passes that  of  any  other  country,  not  excepting  France."  Despite 
all  of  which  defects  and  traits,  Bristed,  in  a  conciliatory  burst, 


AND  STILL  NO  CHANGE  121 

visioned  the  American  people  as  possessing  "the  materials  of 
moral  greatness  superior  to  those  of  any  other  country."  5 

For  attributing  this  last-named  quality  to  Americans,  Bristed 
was  upbraided  by  "The  Quarterly  Review"  (January,  1819). 
It  criticized  him  for  not  telling  how  the  moral  greatness  was 
to  be  accomplished,  and  reproached  him  for  not  having  adopted 
"a  more  modest  tone  in  vaunting  the  superior  materials  for 
moral  greatness  possessed  by  Americans."  Then  asserting 
Britain's  supereminence  in  all  things,  "The  Quarterly  Review" 
used  the  strictures  in  Bristed's  book  as  the  basis  of  a  long  tirade 
against  America.  It  arraigned  both  American  parties  as  bent 
on  conquest  and  plunder;  said  that  virtuous  England  would  not 
buy  Louisiana  from  the  robber  nation  France,  as  unscrupulous 
America  had  bought  it,  and  imputed  to  America  "talk  of  send- 
ing forth  fleets  to  subjugate  the  world." 

At  about  the  same  time  was  published  another  book  on 
America  by  Henry  Bradshaw  Fearon.  This  book  was  strongly 
endorsed  by  Earl  Grey  as  "full  of  the  most  valuable  informa- 
tion, distinguished  by  the  marks  not  only  of  an  inquiring,  ob- 
serving and  intelligent  mind,  but  of  the  greatest  fairness  and 
impartiality."  Some  extracts  will  show  the  book's  nature: 

"The  United  States  are  cursed  with  a  population  undeserving 
of  their  exuberant  soil  and  free  government. 

"We  do  not  meet  in  America  with  even  an  approach  to  sim- 
plicity and  honesty  of  mind. 

"No  people  are  so  vain  as  Americans;  their  self -estimation 
and  cool-headed  bombast,  when  speaking  of  themselves  or  their 
country,  are  quite  ludicrous. 

"There  would  appear  to  be  placed  in  the  very  stamina  of  the 
people  a  coldness,  a  selfishness,  and  a  spirit  of  conceit  which 
form  strong  barriers  against  improvement. 

"The  Americans  are  most  remarkable  for  complete  and  gen- 
eral coldness  of  character  and  disposition — a  cold-blooded  cal- 
lousness of  disposition. 

"Cleanliness  is  scarcely  known  on  this  side  of  the  Atlantic. 

"Neither  sex  [in  Philadelphia]  possesses  the  English  stand- 
ard of  health — a  rosy  cheek.  The  young  females  are  indeed 


122  AMERICA  STRIKES  BACK 

genteel;  but  their  color  is  produced  by  art,  but  for  which  dis- 
gusting practice  many  of  them  might  pass  for  beautiful.  You 
will  be  surprised  to  hear  that  in  the  practice  of  rougeing  the 
cheeks  junior  branches  of  the  Society  of  Friends  are  not  at 
all  deficient. 

"The  dirk  is  the  inseparable  companion  of  all  classes  in  the 
State  of  Illinois. 

"A  cold  uniform  bigotry  seems  to  pervade  all  religious  sects. 

"No  species  of  correction  is  allowed  in  the  American  schools; 
children  even  at  home  are  perfectly  independent."  6 

In  such  vein  of  criticism  Fearon  had  abundantly  more  to  say, 
not  omitting  depiction  of  American  officials  as  ignorant,  vulgar, 
brutal  and  corrupt.  But,  in  the  eyes  of  British  reviewers,  Fea- 
ron's  book  was  not  an  artistic  performance.  He  did  make  one 
concession  to  Americans.  Fearon  informed  the  emigrant  that 
he  would  find  in  America:  "A  country  possessed  of  the  most 
enlightened  civil  and  political  advantages;  a  people  reaping  the 
full  reward  of  their  own  labors ;  a  people  not  paying  tithes ;  not 
subjected  to  heavy  taxation  without  representation;  a  people 
without  spies  and  informers;  a  people  without  an  enormous 
standing  army." 

For  his  saying  this  "The  Quarterly  Review"  (January,  1819) 
assailed  Fearon  as  a  renegade  Englishman,  "evidently  a  man 
of  limited  faculties."  Notwithstanding  which  opinion  it  devoted 
forty-three  pages  to  a  review,  seizing  greedily  upon  his  dis- 
paragements of  America  and  elaborating  them  with  its  supple- 
mentary comments.  Taking  the  current  books  on  America  as 
its  text,  "The  British  Review  or  London  Critical  Journal"  (May, 
1819),  described  Americans  as  "hordes  of  discontented  demo- 
crats, mad,  unnatural,  enthusiastic  and  needy  or  desperate  ad- 
venturers." "The  North  American  Republicans  are  the  most 
vain,  egotistical,  insolent,  rodomontade  sort  of  people  that  are 
anywhere  to  be  found.  They  give  themselves  airs."  "The  Ameri- 
cans may  overrun  a  portion  of  the  world  but  they  will  never 
civilize  those  whom  they  conquer.  .  .  .  The  mass  of  the  North 
Americans  are  too  proud  to  learn,  and  too  ignorant  to  teach." 
"The  States  of  America  can  never  have  a  native  literature  any 


AND  STILL  NO  CHANGE  123 

more  than  they  can  have  a  native  character."  "The  government 
at  Washington  .  .  .  will  one  day  outstrip  all  other  nations  in 
warlike  exploits  and  commercial  wealth,  under  the  auspicious 
stars  of  the  Union." 

Passing  over  various  other  British  books  on  America  of  this 
particular  time,  this  question  obtrudes  itself:  What  was  the 
attitude  of  American  writers  toward  this  stream  of  ridiculous 
calumny?  With  but  one  exception  it  was  that  of  a  meek  ac- 
ceptance and  compliant  acquiescence. 

Why  was  the  name  and  work  of  this  lone  exception — Robert 
Walsh,  Jr. — long  since  allowed  to  sink  into  utter  oblivion?  He 
deserves  a  living  place  in  American  memory.  The  preface  of 
his  book,  published  in  Philadelphia  in  1819,  avouched  as  his 
purpose  not  merely  to  assert  the  merits  of  calumniated  America: 
"I  wish  to  repel  actively,  and  if  possible,  to  arrest  the  war 
which  is  waged  without  stint  or  intermission  upon  our  national 
reputation."  The  hope  was  cherished — but  vainly — he  wrote, 
that  the  spirit  of  envy  and  arrogance  of  English  literary  censors 
would  be  righted.  He  went  on:  "It  was,  too,  believed  by  many 
that  the  British  writers  would  assign  some  bounds  to  their 
attacks  so  long  as  we  forbore  to  recriminate;  and  it  was  thought 
harsh  and  uncharitable  to  touch  the  sores  and  blotches  of  the 
British  nation  on  account  of  the  malevolence  and  folly  of  a  few 
individuals,  or  of  a  party  within  her  bosom.  The  whole  is  proved 
to  be  a  mere  illusion." 

Then,  recounting  "The  Quarterly  Review"  attacks,  Walsh 
showed  how  publications  representing  both  British  parties  had 
joined  in  the  campaign  against  America.  The  Whig  journals 
were  railing  in  the  same  strain  as  the  Tory ;  both  the  Ministerial 
party  and  the  Opposition  had  united,  even  on  the  floor  of  Parlia- 
ment, in  denouncing  "American  ambition  and  cruelty  and  in 
affecting  to  credit  the  coarse  inventions  of  Englishmen  who  have 
visited  us  for  the  express  purpose  of  manufacturing  libels,  or 
betaken  themselves  to  this  expedient  on  their  return  home,  as 
a  profitable  speculation."  The  purpose  of  the  British  campaign, 
Walsh  asserted,  was  "to  inspire  the  British  farmer  and  artisan 
with  a  horror  of  republican  America,  and  the  nations  of  the 
world  with  a  distrust  of  the  spirit  of  her  government."  He 


124  AMERICA  STRIKES  BACK 

added:  "The  British  writers  and  orators  never  throw  out  their 
reproaches  against  the  United  States  without  putting  Great 
Britain  in  glorious  contrast."  7 

Walsh's  book  was  in  nine  sections  dealing  with  Great  Britain's 
political  and  mercantile  jealousy,  its  enmity  after  the  Ameri- 
can Revolution,  the  animosity  of  British  periodical  writers 
toward  America,  their  system  of  derision  and  obloquy,  and  data 
on  the  state  of  society  in  Great  Britain.  He  pointed  out  the 
glaring  inconsistency  of  British  publications  in  making  oc- 
casional strong  admissions  of  the  real  social  conditions  in  Britain 
while  at  the  same  time  virulently  attacking  American  condi- 
tions. Thus  "The  Quarterly  Review,"  speaking  in  1816  on 
British  matters:  "The  great  mass  of  our  population  is  in  a 
state  which  renders  them  the  easy  dupes  of  every  mischievous 
demagogue."  "The  English  are  an  uneducated  people."  "In  the 
road  which  the  English  laborer  must  travel,  the  poor  house  is 
the  last  stage  on  the  way  to  the  grave."  "In  some  parts  of 
England  the  paupers  average  nearly  one-fourth  of  the  popula- 
tion." 

These  admissions,  however,  gave  only  a  meager  idea  of  the 
direness  of  realities  in  Britain.  Into  these  Walsh  should  have 
examined  thoroughly;  and,  above  all,  he  should  have  given  a 
full,  needed  contrast  by  presenting  American  aims  and  ac- 
complishments. Perhaps  then  and  later  the  few  American  writers 
who  undertook  to  defend  their  country  were  smarting  unneces- 
sarily under  the  staple  charge  of  American  boastfulness,  and 
hence  refrained  from  pointing  out  American  deeds.  But  these 
were  of  a  character  entitling  them  to  the  widest  publication. 
American  writers  could  then  with  complete  propriety  have  done 
what  a  noted  Englishman — Macaulay — did  more  than  a  quar- 
ter of  a  century  later  in  Parliament.  As  we  shall  see,  Macaulay 
did  not  stint  giving  high  praise  to  groups  of  settlers  in  New 
England  and  elsewhere  for  having  early  established  the  prin- 
ciple of  general  education — a  principle  gradually  developed 
into  national  proportions. 

What  was  the  record  in  America?  While  still  in  an  embryo 
condition,  in  a  circumjacent  wilderness,  Massachusetts  Bay 
Colony,  as  early  as  1646,  had  enacted  an  educational  law.  This 


AND  STILL  NO  CHANGE  125 

affirmed  "the  necessity  and  singular  use  of  good  literature," 
and  a  law  of  1674  compelled  every  town  to  establish  schools. 
Further  legislation  came  and  similar  laws  were  passed  by 
Plymouth  Colony.8 

"For  the  encouragement  of  learning  and  promotion  of  public 
concernments,"  Connecticut  enacted,  from  1672  to  1714,  a 
series  of  school  laws  requiring  every  town  of  thirty  families  to 
maintain  a  school  to  teach  children  to  read  and  write;  grants 
of  land  and  money  were  made,  and  a  free  school  was  established 
in  each  of  the  towns  of  Hartford  and  New  Haven.  Law  after 
law  iterated  that  the  upholding  and  improvement  of  schools 
was  of  great  importance  to  the  public  weal.9 

By  the  third  quarter  of  the  seventeenth  century  all  New 
England,  except  Rhode  Island,  was  under  a  compulsory  system 
of  education.  Tuition  fees  collected  from  parents,  guardians  or 
apprentice  masters  were  the  usual  means  of  sustaining  the 
schools,  but  the  laws  did  provide  that  in  cases  where  fees  could 
not  be  contributed  toward  paying  teachers'  wages,  the  in- 
habitants in  general  had  to  make  up  the  deficiency. 

Many  laws  were  passed  in  New  England  forever  exempting 
from  taxation  any  lands  or  house  donated  for  school  purposes, 
or  elaborating  plans  of  public  taxation  to  make  up  for  any  lack 
caused  by  insufficiency  of  funds  derived  from  tuition  fees.  The 
thirteenth  article  of  William  Penn's  preface  to  his  "Frame 
of  Government"  in  Pennsylvania  provided  for  "a  committee  of 
manners,  education  and  arts."  10  In  1697  Pennsylvania  Quakers 
established  a  free  school;  their  concern  was  with  elementary 
education;  they  attached  little  value  to  higher  education.  South 
Carolina,  1710,  established  a  free  school;  likewise  New  York 
in  1732.  Virginia,  in  1748,  passed  a  law  requiring  that  all  ap- 
prenticed children,  boys  and  girls,  should  be  taught  to  read 
and  write. 

A  resolution  adopted  by  the  Continental  Congress,  in  1783, 
declared  that  "schools  and  the  means  of  education  shall  be 
forever  encouraged."  The  ordinance  of  1785,  followed  by  that 
of  1789,  reserved  perpetually  for  public  school  support  and  en- 
dowment 640  acres  in  every  township  in  the  territory  northwest 
of  the  Ohio  River.  The  total  of  Government  grants  of  public 
lands  for  schools,  agricultural  colleges  and  universities  ulti- 


126  AMERICA  STRIKES  BACK 

mately  reached  more  than  116,000,000  acres.  New  York  State, 
in  1805,  granted  the  net  proceeds  of  a  half  million  acres  of  un- 
appropriated public  lands  for  a  school  fund.  By  a  Pennsylvania 
law  of  1809  the  expense  of  educating  children  was  made  a 
county  charge. 

This,  a  mere  resume,  shows  the  deep  concern  in  America  for 
popular  education.  In  Britain  the  first  serious  attempt  to  pro- 
vide for  the  education  of  the  populace  was  made  in  1807.  But 
where  in  America  the  opposition  of  the  rich  and  well-to-do  to 
paying  taxes  for  the  education  of  all  children  hindered  for  a 
time  the  establishment  of  the  common  school  system,  the  re- 
sistance in  Britain  was  both  on  that  ground  and  on  many  other 
grounds.  At  the  organization  of  the  Free  School  Society,11  in 
New  York,  in  1805,  DeWitt  Clinton  pointed  out  in  an  address: 
"The  fundamental  error  of  Europe  has  been  to  confine  the  light 
of  knowledge  to  the  wealthy  and  great.  .  .  .  More  just  and  ra- 
tional views  have  been  entertained  on  this  subject  in  the  United 
States.  Here  no  privileged  orders,  no  factitious  distinctions  in 
society,  no  hereditary  nobility,  no  established  religion,  no  royal 
prerogatives  exist  to  interfere  barriers  between  the  people  and 
to  create  distinct  classes  in  society.  All  men  being  considered  as 
enjoying  equality  of  rights,  the  propriety  and  necessity  of  dis- 
pensing, without  distinction,  the  blessings  of  education  followed 
as  a  matter  of  course."  12 

The  Parochial  Schools  bill  in  the  House  of  Commons  was  of 
simple  scope,  providing  for  the  establishment  in  every  parish 
of  an  elementary  school  to  be  supported  by  taxes  and  controlled 
by  the  taxpayers. 

In  spurning  the  measure  the  House  of  Commons  opponents 
advanced  many  arguments.  "For/7  said  one  of  the  chief  ob- 
jectors, "however  specious  in  theory  the  project  might  be  of 
giving  education  to  the  laboring  classes  of  the  poor,  it  would, 
in  effect,  be  found  prejudicial  to  their  morals  and  happiness; 
it  would  teach  them  to  despise  their  lot  in  life,  instead  of  mak- 
ing them  good  servants  in  agriculture  and  other  laborious  em- 
ployments to  which  their  rank  in  society  has  destined  them;  in- 
stead of  teaching  them  subordination,  it  would  render  them 
fractious  and  refractory  ...  it  would  enable  them  to  read 
seditious  pamphlets,  vicious  books  and  publications  against 


AND  STILL  NO  CHANGE  127 

Christianity;  it  would  render  them  insolent  to  their  superiors," 
etc.,  etc.13  Another  antagonist  declared  that  if  large  schools  were 
established,  "immorality  was  more  likely  to  be  imbibed  than 
morality  and  virtue." 

With  the  clause  for  compulsory  education  struck  out,  the  bill 
was  finally  passed  by  the  House  of  Commons.  In  the  House  of 
Lords  the  Archbishop  of  Canterbury  objected  to  the  bill  as 
leaving  little  or  no  control  to  the  minister  of  the  parish.  "This," 
he  said,  "would  go  to  subvert  the  first  principles  of  education 
in  this  country,  which  had  been,  and  he  trusted  would  continue 
to  be  under  the  control  and  auspices  of  the  [Church  of  England] 
establishments.  .  .  .  Your  lordships'  prudence  will,  no  doubt, 
guard  against  innovations  that  might  shake  the  foundation  of 
religion."  Earl  Stanhope  then  pointed  out  that  the  bill  had  noth- 
ing to  do  with  religion.  "It  is  merely  to  teach  its  objects  spell- 
ing, reading,  writing  and  arithmetic  for  purposes  useful  in  life; 
and  in  a  manufacturing  country  like  this  .  .  .  the  superiority 
of  workmen  with  some  education,  over  those  who  had  none,  must 
sensibly  be  felt  by  all  the  great  manufacturers  in  the  coun- 
try." 14  The  House  of  Lords  threw  out  the  bill,  and  more  than 
sixty  years  passed  before  Parliament  consented  to  enact  a  sim- 
ilar measure. 

In  Europe  generally  efforts  to  prevent  popular  education  were 
long  successful.  During  the  French  Revolution  educational  pro- 
posals were  drafted,  but  there  was  neither  the  time  nor  the  op- 
portunity to  establish  any  as  realities.  Giving  no  attention  to 
primary  schools,  the  first  Napoleon  concerned  himself  exclu- 
sively with  university  education,  and  likewise  the  succeeding 
king  under  whom  the  preposterously  scanty  sum  of  50,000 
francs  were  granted  for  popular  education.  It  was  not  until  1833 
that  a  law  was  passed  in  France  authorizing  elementary  schools 
in  all  department  capitals  and  in  communes;  but  this  law  was 
so  devised  that  the  only  qualifications  demanded  from  teachers 
was  authorization  granted  by  the  bishops.  Still  powerful,  the 
Church  discouraged  public  schools,  and  to  a  large  extent  the 
law  remained  a  dead  letter.  The  years  1881-1882  were  reached 
before  a  free,  compulsory  and  secular  system  of  education  was 
instituted  in  France. 

The  practical  effect  of  Holland's  law  of  1806,  decreeing  pri- 


128  AMERICA  STRIKES  BACK 

mary  schools,  was  to  make  them  charity  schools;  while  the  mid- 
dle classes,  upon  whom  the  greater  share  of  the  taxes  fell,  sent 
their  children  to  private  schools.  Furthermore,  the  provision  in 
Holland's  law  of  1806  declaring  public  schools  entirely  inde- 
pendent of  ecclesiastical  influence,  led  to  dissatisfaction  on  the 
part  of  Belgium's  Catholic  population  and  to  the  separation  of 
the  two  countries  in  1830.  Twelve  years  later,  in  deference  to 
the  Catholic  minority  in  its  boundaries,  Holland  authorized  con- 
sideration of  the  religious  faith  of  teachers,  and  examination  of 
textbooks  by  the  clergy.  A  dozen  more  years  passed  before 
Holland  enacted  a  law  which,  on  the  whole,  proved  satisfactory 
to  the  conflicting  elements.15 

In  Germany  serfdom  was  not  abolished  until  1807,  and,  in 
the  elementary  schools  thereafter  established,  religious  educa- 
tion in  accordance  with  the  creed  of  the  commune's  majority  was 
the  paramount  duty;  the  local  clergyman  was  ex  officio  a  mem- 
ber of  the  school  committee  and  was  authorized  to  censure  de- 
fects, but  final  decisions  were  reserved  to  the  State  rulers.16 

No  reliable  data  of  illiteracy  in  continental  Europe  can  be 
located.  In  Britain  such  portion  of  elementary  education  as  was 
popularly  given  was  long  dependent  entirely  upon  casual  phil- 
anthropic endowment,  irregular  charitable  contributions,  and 
was  conducted  strictly  in  line  with  the  Church  of  England  doc- 
trine and  discipline.  Upon  these  bases  the  National  Society  was 
formed  in  1811.  By  1817  the  National  Society  had  725  schools 
and  117,000  scholars,  all  under  the  direct  control  of  the  parish 
minister.17 

But  so  wholly  inadequate  were  the  efforts  of  this  body  in  a 
population  in  England  and  Wales  approaching  12,000,000  that 
vast  numbers  of  children  grew  up  in  densest  ignorance.  In  Lon- 
don alone,  a  Parliamentary  inquiry  showed,  from  120,000  to 
130,000  children  were  utterly  without  means  of  education.  A 
large  portion  had  to  drudge  long  hours;  about  4,000  were  hired 
by  parents  to  beggars  or  were  employed  as  assistants  in  pilfer- 
ing. Toil,  mendicity,  theft,  prostitution — this  variously  was  the 
fate  of  swarms  of  London  children.18 

Testifying  before  a  Parliamentary  investigating  committee  in 
1818,  William  Freeman  Lloyd,  secretary  of  the  Sunday  School 
Society,  gave  this  picture  of  conditions  in  London:  "There  are 


AND  STILL  NO  CHANGE  129 

an  amazing  number  of  children  in  the  metropolis  who  are  pre- 
vented from  attending  any  school  whatever,  from  the  absolute 
want  of  anything  like  decent  clothing;  there  are  a  vast  number 
of  children  employed  in  selling  matches,  sweeping  the  streets, 
and  various  low  employments.  .  .  .  Many  of  the  parents  are 
likewise  so  extremely  poor,  where  there  are  large  families,  as 
to  be  unable  to  procure  clothing.  In  Southwark,  in  one  district, 
2,000  children  were  found  who  could  not  attend  any  school 
whatever  for  want  of  clothing."  19  Conditions  similar  to  those 
in  London  prevailed  in  all  of  the  large  British  cities,  and  more 
markedly  so  in  the  manufacturing  districts.  In  its  report  the 
Parliamentary  Committee  on  "Education  of  the  Lower  Or- 
ders" dwelt  upon  "the  neglect  and  abuse  of  charitable  funds 
connected  with  education,"  and  upon  the  fact  that  "equal  negli- 
gence and  malversation  appears  to  have  prevailed  in  all  other 
charities."  20  Yet  for  fifty-two  years  longer  Britain  allowed  the 
operations  and  influence  of  these  charitable  societies  to  control 
such  scant  popular  education  as  was  given,  and  to  be  supreme  in 
shaping  its  spirit  and  methods. 

Robert  Walsh's  book  made  but  the  slightest,  most  transient 
impression  in  British  editorial  offices.  In  a  discourse  upon  the 
book  "The  Edinburgh  Review,"  in  May,  1820,  admitted  that 
America  had  cause  for  complaint.  "Nothing  can  be  more  des- 
picable and  disgusting,"  it  agreed,  "than  the  scurrility  with 
which  she  has  been  assailed  by  a  portion  of  the  press  of  this 
country — and  disgraceful  as  these  publications  are,  they  speak 
the  sense  of  a  powerful  and  active  party  in  the  nation." 

Seeking  to  place  the  blame  upon  the  Tory  Party,  which,  it 
said,  was  not  friendly  to  liberty  and  was  hostile  to  all  extension 
of  popular  rights,  "The  Edinburgh  Review"  went  on:  "Now  it 
is  quite  true  that  this  party  dislikes  America  and  is  apt  enough 
to  decry  and  insult  her.  Its  adherents  have  never  forgiven  the 
success  of  her  war  of  independence — the  loss  of  a  nominal  sover- 
eignty, or  perhaps  of  a  real  power  of  vexing  and  oppressing — 
her  supposed  rivalry  in  trade — and,  above  all,  the  happiness 
and  tranquillity  which  she  enjoys  under  a  republican  form  of 
government.  Such  a  spectacle  of  democratic  prosperity  is  un- 
speakably mortifying  to  their  high  monarchical  principles,  and 


130  AMERICA  STRIKES  BACK 

is  easily  imagined  to  be  dangerous  to  their  security."  Pursuing 
this  line  of  partisan  differentiation,  "The  Edinburgh  Review" 
enlarged  upon  the  alarm  caused  in  England  by  the  steady  suc- 
cess of  American  popular  government.  It  then  proceeded  to  re- 
hearse "the  undeniable  defects  of  Americans"  which  it  had 
frequently  specified,  and  "some  indefensible  absurdities  of 
Americans"  which  it  had  often  scored. 

Only  a  few  months  before  its  comments  upon  Walsh's  book, 
"The  Edinburgh  Review"  had  published  a  splenetic  attack  by 
Sydney  Smith  upon  America,  taxing  it  with  having  done  ab- 
solutely nothing  for  the  sciences,  arts,  literature  or  the  drama. 
"In  the  four  quarters  of  the  globe,"  it  had  sneeringly  asked, 
"who  reads  an  American  book?  or  goes  to  an  American  play? 
or  looks  at  an  American  picture  or  statue?  .  .  .  Who  drinks 
out  of  American  glasses?  or  eats  from  American  plates?  or  wears 
American  coats  and  gowns?  or  sleeps  in  American  blankets?" 
And,  as  a  climax,  it  had  vented  the  never-failing  British  de- 
nunciation of  America  for  maintaining  negro  slavery.  "Under 
which  of  the  old  tyrannical  governments  of  Europe  is  every 
sixth  man  a  slave,  whom  his  fellow-creatures  may  buy  and  sell 
and  torture?" 

Lord  Castlereagh,  Foreign  Secretary  of  Britain,  had  sent  out 
a  questionnaire  on  the  subject  of  negro  slavery.  According  to 
answers  made  by  the  African  Society  of  London,  British,  Portu- 
guese, French,  Dutch,  American  and  Danish  vessels  all  par- 
ticipated in  the  traffic.  During  a  series  of  years  in  the  late 
eighteenth  and  early  nineteenth  century,  British  ships  alone  an- 
nually carried  from  Africa  55,000  slaves.  Defying  prohibitory 
laws  of  the  American  Government  and  those  of  several  Euro- 
pean Governments,  ships  of  various  nations,  including  British 
and  American,  persisted  in  the  traffic.  British  condemnations  of 
Americans  for  enslaving  human  beings  contained  no  recognition 
of  the  outlawing  of  slavery  by  various  Northern  States.  But  this 
fact  was  made  a  most  pregnant  point  by  some  speakers  in  the 
British  Parliament  when,  in  1833,  a  bill  was  considered  for 
paying  £20,000,000  to  West  India  slave  owners  for  the  freeing 
of  negro  slaves  there.  Opponents  to  making  payment  reminded 
the  House  of  Commons:  To  be  consistent  with  that  body's  de- 
clared principle  that  no  man  could  claim  property  in  his  fellow 


AND  STILL  NO  CHANGE  131 

man,  nothing  should  be  paid,  and  they  held  forth  the  example 
of  a  number  of  American  States  which,  in  freeing  slaves,  had 
not  paid  a  dollar  to  the  owners.21  Sir  Eardley  Wilmot  asked  why 
appropriations  were  not  made  to  relieve  the  great  distress  in 
England  itself;  he  instanced  the  horrible  lot  of  workers  whose 
earnings  did  not  average  two-and-a-half  pence  a  day.22  Over 
such  protests  the  £20,000,000  was  obligingly  voted. 

Using  Walsh's  book  as  a  renewed  opportunity  for  berating 
America,  "The  Edinburgh  Review"  fell  back  upon  previous 
inimical  books.  It  had  the  testimony  of  every  traveler  who  had 
been  in  America,  it  asserted,  to  justify  its  branding  of  Amer- 
icans as  inebriates,  rudely  inquisitive,  absurdly  vain,  and  of- 
fensively boastful.  Had  the  practice  of  critical  visiting  been  re- 
versed, American  critics  would  have  found  in  British  public 
meetings  a  notorious  custom  of  high-flown  boasting.  The  con- 
tinuance of  this  self-congratulatory  process  drew  forth  biting 
comment  from  at  least  one  noted  Englishman,  Lord  Brougham, 
then  Lord  Chancellor,  who  chaffed  at  the  Pharisaism  bedevil- 
ing English  public  speakers.  "We  are  described,"  he  said  with 
fine  pungency,  "as  the  people  of  all  other  nations,  possessing  the 
highest  tone  of  moral  and  religious  feeling.  I  can  only  say  that 
I  hope  this  is  the  case;  but  this  is  undoubted — that  whether 
we  are  the  most  moral  and  religious  people  in  the  world  or  not, 
we,  of  all  people  in  the  world,  are  the  most  satisfied  that  we 
are  so."23 

John  M.  Duncan's  two  volumes  on  America  and  Canada  were 
largely  an  inane  description  of  scenes  and  places.  Such  observa- 
tions as  he  otherwise  made  were  partly  favorable,  and  in  part 
unfavorable  to  Americans.  Of  their  literary  and  religious  char- 
acteristics, which  he  esteemed  their  most  important  features, 
he  was  persuaded  that  "much  misapprehension  prevails  in  my 
native  country."  He  praised  educational  conditions  in  New  Eng- 
land; "it  is  next  to  impossible  to  discover  in  Connecticut  a  white 
native  who  cannot  read  and  write."  He  credited  real  religious 
liberty  to  America  while  in  England,  he  pointed  out,  toleration 
only  existed.  Reversely,  he  saw  no  merit  in  American  "univer- 
sal" suffrage,  deprecated  its  democracy  as  mere  popular  clamor, 
and  extolled  Britain's  political  system  as  the  nearest  to  perfec- 
tion.24 


132  AMERICA  STRIKES  BACK 

"The  British  Review  and  London  Critical  Journal,"  in  May, 
1824,  used  this  book  as  the  ground  for  a  long  declamation 
against  America.  It  sermonized  on  American  lack  of  taste  due 
to  the  "republican  state  of  discipline  which  prevails  in  their 
schools";  spurted  captious  remarks  on  "the  evil  tendency  of 
universal  suffrage";  and  ended  with  this  outburst:  "Our  pos- 
session of  Canada,  we  know,  is  a  circumstance  very  galling  to 
American  ambition." 

Without  exception  various  important  British  magazines  and 
other  publications  were  intent  upon  contrasting  the  excellencies 
of  an  hereditary  social  order  with  the  grievous  defects  of  the 
American  system.  In  one  way  or  another  these  publications 
lauded  an  hereditary  order  as  the  only  kind  assuring  culture 
and  manners.  The  sweeping,  rapid  movement  in  America  for 
education  of  the  mass  aroused  increasing  antagonism  among  the 
British  upper  classes  and  their  spokesmen. 

In  large  portions  of  America  the  introduction  of  manhood 
suffrage  was  taken  as,  of  course,  presupposing  the  need  of  an 
enlightened  citizenry.  Indiana  led,  in  1824,  with  a  general  school 
law,  and  Illinois  followed  in  the  next  year.  Widely  throughout 
America  articles  were  published  and  addresses  made  at  educa- 
tion conventions  giving  the  clearest  reasons  why  education  was 
held  a  supreme  duty.25  For  the  first  time  in  its  history,  the 
Massachusetts  law  of  1827  made  compulsory  the  entire  sup- 
port of  the  schools  by  taxation;  when,  in  1820,  a  Boston  pri- 
mary school  committee  had  discovered  that  three  hundred  chil- 
dren were  not  attending  school,  it  expressed  its  "great  surprise 
and  grief."  26  At  another  time  consternation  was  felt  in  the 
Rhode  Island  legislature  because,  in  a  population  of  more  than 
100,000,  there  had  been  found  1,600  adults  unable  to  read  and 
write.27  From  1827  onward  Ohio,  Michigan,  Pennsylvania, 
Kentucky,  New  York  and  other  States  established  public  school 
systems.  A  typical  address  of  the  period  was  that  of  S.  Lewis 
before  the  Education  Convention  at  Columbus,  Ohio,  in  1836: 
"Other  nations  have  hereditary  sovereigns.  .  .  .  These  chil- 
dren about  your  street,  who  cannot  even  speak  your  language, 
are  your  future  sovereigns.  Is  it  not  important  that  they  be 
well  educated?  ...  All  nations  are  looking  on  at  our  experi- 
ment; individuals  bid  us  Godspeed;  but  every  court  in  Europe 


AND  STILL  NO  CHANGE  133 

would  rejoice  to  see  us  do  as  they  have  long  prophesied  we  must 
do,  Viz.  dissolve  in  anarchy."  28 

Son  of  Sir  James  Hall,  baronet,  Captain  Basil  Hall,  of  the 
Royal  Navy,  toured  America  in  1827  and  1828.  The  result 
was  a  couple  of  volumes,  which  unmistakably  were  the  quin- 
tessence of  snobbery.  As  in  the  case  of  various  other  critical 
books,  his  volumes,  after  their  issuance  in  Europe,  were  re- 
published  in  America  and  widely  read. 

Jeering  at  American  education  was  one  of  Hall's  main 
themes.  With  a  superlative  condescension  he  explained  to 
America  how  in  England  families  of  high  station  kept  their 
young  men  at  the  public  (private)  schools  and  universities. 
"We  do  not  maintain  the  doctrine  of  entire  independence,  ac- 
cording to  the  American  acceptation  of  the  term,  to  be  a  good 
one.  Moreover,  with  us  all  men  are  divided  into  ranks  or 
classes,  which  although  they  blend  insensibly,  and  intermix 
with  one  another  when  they  meet,  are  yet  very  obviously  dis- 
tinguished, while  the  acknowledged  rights  and  privileges  of 
each  are  scrupulously  preserved.  Every  one  finds  out,  also,  in 
the  long  run,  that  his  best  chance  of  success  and  happiness 
consists  in  conforming  as  nearly  as  possible  to  the  established 
habits  of  that  branch  of  society  in  which  he  happens  to  be  born, 
or  which  he  may  reach  by  dint  of  extraordinary  industry  or 
good  fortune.  I  may  even  add,  that  without  doing  so,  no  man 
is  considered  respectable.  Every  class  has  its  own  particular 
marks  by  which  it  is  distinguished  from  all  the  rest."  And  more 
to  the  same  effect. 

Informing  his  readers  that  he  had  been  told  a  hundred  times 
that  comparisons  should  not  be  made  between  so  old  a  country 
as  England  and  so  new  a  country  as  America,  he  declared  that 
he  "saw  not  a  single  reason  why  not."  He  compared  America 
and  Canada  thus:  "In  the  United  States  places  of  power  and 
eminence  depend  entirely  upon  popular  caprice  .  .  .  the  fluctu- 
ating will  of  a  giddy  populace.  In  British  provinces  all  situa- 
tions of  honor  and  profit  are  derived  from  the  crown.  After  all, 
it  is  perhaps  better  to  be  subservient  to  a  monarch  than  to  a 
mob.'7  His  volume  was  replete  with  jibes  at  "the  visionary  doc- 
trine of  universal  equality,"  and  the  incapacity  of  America  to 
produce  capable  men.29 


134  AMERICA  STRIKES  BACK 

Contrary  to  Captain  Hall's  opinion,  however,  one  may  well 
question  whether  the  Irish  of  his  day  found  their  "best  chance 
of  success  and  happiness"  in  conforming  to  the  habits  of  their 
fathers.  Aside  from  the  ignorance,  destitution  and  squalor 
among  the  "lower  classes"  in  Britain  itself,  the  condition  of 
British-ruled  Ireland  at  this  time  would  seem  unbelievable  were 
it  not  attested  by  indubitable  testimony.  This,  given  in  1825 
before  a  House  of  Lords  committee,  showed:  One  million  of 
seven  millions  of  the  Irish  existed  entirely  by  charity  and  plun- 
der. A  host  of  vagrant  mendicants  infested  Ireland.  Very  rarely 
did  the  Irish  peasant  have  money;  not  one  in  twenty  Irishmen 
found  constant  employment;  heavy  taxes  and  a  tithe,  even  on 
potatoes,  the  chief  food,  for  support  of  a  hostile  religious  estab- 
lishment, further  beggared  the  people.  To  get  employment,  Irish 
Catholics  had  to  conform  to  Protestantism;  Catholics  were  ex- 
cluded from  various  offices,  including  grand  juries;  unless  they 
took  an  oath  obnoxious  to  their  religious  convictions,  they  were 
not  allowed  to  qualify  for  elections  and  were  not  even  eligible 
to  become  guardians  for  their  own  children.  So  severe  were  the 
magistrates  in  penalizing  for  the  least  infraction  that  (such 
was  the  testimony  of  Daniel  O'Connell,  the  noted  Irish  leader), 
to  influence  the  magistrates'  decisions,  it  was  the  common  prac- 
tice of  peasant  men  who  could  do  so  to  make  presents,  and  of 
women  to  yield  their  chastity,  to  the  magistrates.30 

Movements  in  Britain  for  the  repeal  of  laws  decreeing  death 
for  numerous  transgressions  were  long  stolidly  viewed  by  a 
Parliament  domineered  by  upper  class  insensitiveness  to  any 
compassion.  Prolonged  agitation  did  force  the  abolition,  be- 
tween 1818  and  1824,  of  capital  punishment  for  twenty-one  of- 
fences. Complaining  that  many  ferocious  laws  remained,  hu- 
manitarians pressed  for  their  repeal.  A  typical  petition,  in  1833, 
repeated  the  strong  language  of  previous  petitions  in  denounc- 
ing Britain's  criminal  law  as  "vindictive  and  barbarous";  the 
introducer  of  the  petition  held  up  to  Parliament,  as  an  example 
to  be  emulated,  the  case  of  America  where  one  or  two  crimes 
only  were  punishable  by  death.31  Prosecutions  in  England  and 
elsewhere  for  criticism  (stretched  into  charge  of  libel),  and  on 
medieval  lines  for  blasphemy,  were  not  infrequent.32 

No  sense  of  weariness  in  harping  upon  the  same  strain  af- 


AND  STILL  NO  CHANGE  135 

fected  British  reviewers.  Hall's  book  had  an  immediate  wide 
circulation  and  was  made  the  text  of  a  new  explosion  against 
America.  To  give  his  book  special  weight  "The  Quarterly  Re- 
view," in  November,  1829,  admitted  that  most  of  his  predeces- 
sors had  made  "only  hasty  flights  through  the  republic  .  .  . 
and  then  fancied  themselves  qualified  to  impart  to  the  Euro- 
pean world  some  information  respecting  their  descendants  be- 
yond the  Atlantic."  Ignoring  the  clear  fact  that  it  had  taken 
seriously  each  of  the  previous  books,  "The  Quarterly  Review" 
certified  Hall's  book  as  a  most  genuine,  true  series  of  observa- 
tions. 

American  democracy,  said  that  publication,  lacked  stimulus 
in  producing  characters  of  "excellent  moral  principles,"  and 
never,  anyway,  would  use  such  characters  "whilst  all  power 
shall  depend  upon  the  fluctuating  will  and  coarse  passions  of 
an  illiterate,  conceited,  encroaching  and  sottish  populace."  Cap- 
tain Hall,  that  genteel  quarterly  further  said,  "must  have  col- 
lected many  instances  of  American  vulgarity,  knavery,  sottish- 
ness  and  hypocrisy."  And  still  further:  "The  eager,  universal 
desire  of  gain  is  unchecked  by  any  classes  of  persons  or  by  any 
considerable  numbers  of  individuals  who  are  so  easy  in  cir- 
cumstances as  not  to  dwell  constantly  on  subjects  connected 
with  profit  and  loss.  This  .  .  .  leads,  with  a  great  portion  of 
the  people,  to  a  species  of  trickery  and  deceit.  .  .  .  The  specu- 
lations of  land  jobbers,  bankers,  manufacturers,  merchants  and 
dealers  in  funds  conduct  operations  to  an  extent  .  .  .  far  be- 
yond anything  that  can  be  conceived  by  those  acquainted  even 
with  the  most  gambling  marts  of  Europe."  And  at  about  the 
same  time  "The  Times"  of  London  added,  apropos  of  America: 
"The  worship  of  the  divinity  of  lucre  is  withal  so  universal,  we 
might  add,  so  fanatical  throughout  this  money-making  repub- 
lic." 

In  the  year  before  Captain  Hall  betook  himself  to  America 
there  turned  up  a  reverberating  scandal  implicating  various 
members  of  Parliament.  England,  in  1824,  was  in  another  vortex 
of  stock  speculation,  this  time  in  gaslight,  railway  and  mining 
enterprises  of  which  many  members  of  Parliament  were  pro- 
moters or  in  which  they  were  financially  concerned.  General  Sir 
William  Congreve  and  some  other  members  of  Parliament  ac- 


136  AMERICA  STRIKES  BACK 

quired  the  Arigna  mines,  chiefly  iron,  in  Ireland,  for  £25,000 
and  then  organized  the  Arigna  Iron  and  Coal  Company,  capital- 
izing it  for  £300,000,  in  shares  of  £50  each. 

Two  years  later  the  shrill  outcry  from  investors  caused  the 
appointment  of  an  investigating  committee  by  the  House  of 
Commons.  After  taking  much  testimony  this  committee  re- 
ported of  the  company's  managing  director:  "His  management 
in  feeding  the  [stock]  market  through  the  medium  of  brokers, 
aided  by  the  delusive  representations  which  the  prospectus  of 
the  company  afforded,  and  the  dazzling  effect  of  the  names  of 
persons  of  station  and  eminence  associated  in  the  undertaking, 
seems  to  have  produced  results  which,  even  at  that  period  of 
epidemic  speculation,  could  scarcely  have  been  anticipated." 
The  committee  related  how  the  "insiders"  had  made  large  sums 
from  stock- jobbing  operations  which  it  termed  "a  deliberate 
fraud,"  "a  fraudulent  pillage  of  the  public."  Specified  members 
of  Parliament,  the  committee  found,  did  pocket  money  from 
the  sale  of  shares;  in  roundabout  fashion  the  committee  sug- 
gested that  until  some  impartial  authority  admitted  their  title 
to  the  money,  they  should  return  it.33  No  record  is  available 
showing  that  they  did. 

The  practice,  or  rather  the  profession,  of  lobbying  has  been 
generally  supposed  an  insidious  American  conception,  the  spawn 
of  American  corruption.  In  the  British  Parliament  lobbying  had 
been  elevated  into  a  fine  art  reserving  all  services  and  profits 
to  the  honorable  members  themselves.  They,  and  not  outsiders, 
did  the  lobbying.  So  malodorous  did  the  scandal  become  that 
Parliament  could  no  longer  blink  it.  The  debate,  on  February 
26,  1830,  brought  out  undisputed  facts.  On  various  House  oi 
Commons  committees  were  members  whose  own  financial  in- 
terests were  involved  in  the  bills  before  them.  Canal,  gas-light, 
railway  and  other  companies  had  their  men  securely  stationed 
on  these  committees.  In  a  seeming  mood  of  sudden  virtue,  the 
House  of  Commons  passed  a  resolution  forbidding  any  member 
to  engage,  directly  or  indirectly,  in  promoting  private  bills  for 
pecuniary  rewards.34  This  rule  did  not  in  the  least  disconcert 
the  implicated  M.P.'s;  they  merely  evaded  it  by  transferring 
their  lobbying  business  to  sons  or  other  relatives  or  to  partners. 


AND  STILL  NO  CHANGE  137 

This  ruse  caused  another  lively  discussion  in  the  House  of  Com- 
mons, in  1837,  but  nothing  was  done.35 

Various  American  money  lenders  found  furtive  ways  of  cir- 
cumventing laws  against  usury,  but  in  superfine  methods  on  this 
score  they  could  teach  nothing  to  the  British.  On  the  London 
Stock  Exchange  laws  against  usury  were  almost  invariably 
evaded  by  bonus  and  other  devices;  charges  of  seven,  eight  and 
nine  per  cent  were  customary.  So  testified  David  Ricardo,  the 
noted  political  economist,  before  a  Parliamentary  Committee. 
On  mortgages  many  persons  were  compelled  to  pay  an  onerous 
9  to  12  per  cent — a  general  condition  affirmed  by  the  testimony 
of  bankers  and  other  witnesses.  The  Committee  reported  that 
laws  against  usury  "have  been  extensively  evaded,"  subjecting 
the  borrowers  to  "enormous  charges."  36 

Industrialism  had  made  further  vast  strides  in  England.  Man- 
chester was  an  example;  from  fifty- four  factories  there  in  1820 
the  number  had  risen  to  seventy-three  by  1828.  Britain's  ex- 
ports of  more  than  £50,000,000  (including  £10,000,000  of  for- 
eign and  colonial  merchandise),  were  almost  five  times  those 
of  the  United  States.  Nearly  one-half  of  American  exports  com- 
prised raw  cotton,  and  much  of  the  remainder  rice,  indigo,  pork 
and  other  produce.  Above  600,000  bales  of  the  more  than  1,000,- 
000  bales  of  cotton  raised  in  America  in  1831  were  exported 
to  Britain;  127,000  bales  to  France;  and  27,000  to  other  Euro- 
pean countries.37  In  the  matter  of  aggregate  factories  the  best 
procurable  comparison  for  America  and  Britain  is  one  for  the 
years  1831  and  1836.  Enumeration  of  factories  in  the  entire  ex- 
tent of  America,  with  a  population  of  12,850,000  in  1831, 
showed  666  woolen  and  cotton  factories,  mostly  small  cotton- 
goods  concerns,  and  a  few  hundred  other  kinds  of  factories, 
likewise  mainly  small.38  Britain  in  1836,  with  a  population  of 
about  26,000,000,  contained  3,016  cotton,  woolen,  flax  and  silk 
factories.  But  British  returns  included  only  textile  mills  coming 
within  the  provisions  of  the  Factories  Regulation  Act,  and  did 
not,  of  course,  comprehend  the  additional  large  number  of  other 
kinds  of  factories.39  More  than  half  of  the  employees  in  British 
textile  factories  were  under  eighteen  years  of  age,  and  of  these 
a  great  number  were  in  childhood. 


CHAPTER   XII 
INSULAR  SELF-SATISFACTION 

A  BARRISTER  who  cared  more  for  learning  than  for  law,  Thomas 
Anthony  Trollope  had  been  unsuccessful  in  his  profession  and 
also  in  a  later  attempt  to  run  a  farm.  His  wife,  Frances  Milton 
Trollope,  thought  prospects  of  making  money  in  America  were 
promising.  She  went  from  England  to  the  pioneer  town  of  Cin- 
cinnati to  establish  a  bazaar,  English  style.  The  building  which 
she  ordered  erected  was,  according  to  her  countryman  Captain 
Frederick  Marryatt  who  subsequently  visited  Cincinnati, 
"composed  of  every  variety  of  architecture."  He  described  it 
as  altogether  "preposterous."  Her  business  was  entirely  un- 
suited  to  the  needs  of  the  population  which  was  not  concerned 
in  buying  dainties.  Cincinnati  folk,  Captain  Marryatt  wrote, 
dubbed  the  venture  "Trollope's  Folly."  He  commented:  "It  is 
remarkable  how  a  shrewd  woman  like  Mrs.  Trollope  should 
have  committed  such  an  error." 

Returning  to  England  deeply  disappointed,  Mrs.  Trollope 
wrote  her  book,  "Domestic  Manners  of  the  Americans."  Not 
notoriety  but  revenue  was  Mrs.  Trollope's  object.  Her  subject 
in  general  was  hackneyed  by  this  time,  but  European  prejudices 
against  America  were  as  strong  as  ever,  and,  as  repeated  ex- 
perience had  shown,  were  highly  profitable  if  purveyed  to  with 
the  right  animus.  Well  did  Mrs.  Trollope  do  the  catering;  in 
Britain  her  book  quickly  attained  five  editions,  then  rated  an 
extensive  sale,  and  it  was  translated  into  French,  Italian  and 
German.  It  netted  her  some  £600  which  replenished  the  desper- 
ate family  finances.  She  was  flattered  and  feted;  her  reputation 
as  a  writer  was  so  puffed  and  her  writings  in  such  demand  that 
thereafter  she  wrote  fifty  novels  and  books  of  travel,  all  of  a 
kind  palatable  to  popular  fancy. 

"Domestic  Manners  of  the  Americans"  was  one  of  a  number 
of  books  on  America  published  almost  simultaneously  in  Eng- 

138 


INSULAR  SELF-SATISFACTION  139 

land.  One  of  the  others  was  James  Stuart's  "Three  Years  in 
North  America" — a  book  that  gave  a  refreshing  change  from 
the  customary  traducing.  Stuart  had  none  of  Captain  Hall's 
love  of  the  patriciate  nor  any  of  Mrs.  Trollope's  affectation 
of  gentility.  He  allowed  full  credit  to  America  for  its  diffusion 
of  general  education,  and  for  its  rights  of  religious  equality  as 
distinct  from  the  European  vouchsafing  of  toleration.  He 
warned  British  travelers  not  to  expect  in  America  the  deference 
given  to  rank  and  station  in  the  Old  World.  Stuart's  book  made 
no  impression,  while  Mrs.  Trollope's  was,  with  perhaps  one 
exception,  effusively  hailed  in  Europe.  "The  Edinburgh  Re- 
view" could  not  stomach  the  "great  smartness"  of  her  style 
and  the  pretentious  superficiality  of  her  comments.  In  its  re- 
view, July,  1832,  it  accused  her  of  not  making  a  single  sensible 
observation  on  any  important  subject.  Of  her  pseudo  facts  it 
said:  "The  adroitness  with  which  they  have  been  doctored, 
gingered  and  got  up,  resembles  the  skill  of  a  clever  horsedealer 
preparing  for  a  fair." 

Mrs.  Trollope's  book  was  a  prolonged  sneer.  American  edu- 
cational institutions,  she  represented,  taught  thoroughly  little 
else  than  reading,  writing  and  bookkeeping.  "Republican  equal- 
ity was  most  distressing."  Americans  were  dull ;  "the  total  and 
universal  want  of  good,  or  even  pleasing  manners,  both  in  males 
and  females,  is  remarkable."  She  emitted  floods  of  words  on 
the  essential  vulgarity  of  republics  and  their  disastrous  effect 
upon  development  of  the  arts.  Rebuking  her  lack  of  knowl- 
edge, "The  Edinburgh  Review"  felt  called  upon  to  inform  her 
of  the  flourishing  state  of  the  arts  in  the  ancient  republics  of 
Greece  and  Rome  and  in  Florence.  Mrs.  Trollope  imputed  to 
Americans  "a  profound  ignorance  on  the  subject  of  art,"  and 
an  "utter  ignorance  respecting  pictures  to  be  found  among  per- 
sons of  the  first  standing  in  society."  And  finally:  "Neither  art, 
science,  learning  or  pleasure  can  seduce  Americans  from  pur- 
suit of  money." 

Just  so;  but  what,  speaking  of  art,  was  the  record  of  Mrs. 
Trollope's  home  land  in  that  respect? 

The  low  state  of  the  pictorial  arts  in  Britain  was  disclosed 
by  the  records  of  Parliament  itself.  A  resolution  to  appropriate 
the  modest  sum  of  £3,000  for  the  British  Museum  had  come 


140  AMERICA  STRIKES  BACK 

before  the  House  of  Commons  in  1777.  To  the  greater  number 
of  members  the  subject  of  art  was  new,  bewildering  and  discon- 
certing. Of  the  entire  membership  less  than  a  handful  mani- 
fested any  interest.  John  Wilkes  tried  hard  to  arouse  fellow 
members  from  their  lethargy.  "The  British  Museum  possesses 
few  valuable  paintings/7  he  told  them,  "yet  we  are  anxious  to 
have  an  English  school  of  painters.  If  we  expect  to  rival  the 
Italian,  the  Flemish  or  even  the  French  schools,  our  artists 
must  have  before  them  the  finished  works  of  the  greatest  mas- 
ters." Talking  against  a  mass  of  inertia,  Wilkes  announced  a 
forthcoming  offer  to  Parliament  by  Sir  Robert  Walpole's  fam- 
ily to  sell  its  great  collection  of  paintings,  Italian  and  others. 
"I  hope,"  Wilkes  fervently  said,  "that  it  will  not  be  dispersed 
but  purchased  by  Parliament,  and  added  to  the  British  Mu- 
seum. .  .  .  Such  an  important  acquisition  would  in  some  de- 
gree alleviate  the  concern  which  every  man  of  taste  now  feels 
at  being  deprived  of  viewing  those  prodigies  of  art.  ...  At 
present  they  are  perishing  in  a  late  baronet's  smoky  house  at 
the  end  of  a  great  smoky  town."  And  now  Wilkes  reminded  his 
fellow  members  of  a  fact  which  was  generally  well  known 
but  about  which  Parliament  could  never  be  persuaded  to  take 
any  action.  "Those  paintings,"  he  said  with  extra  emphasis,  "are 
entirely  secreted  from  the  public  eye,  yet  they  were  purchased 
with  public  money  before  the  accession  of  the  Brunswick  line." 
Wilkes  did  not  explain  the  process  by  which  paintings  bought 
with  public  funds  could  have  been  claimed  and  held  as  personal 
possessions.  He  asked  whether  there  could  be  a  greater  mortifi- 
cation to  any  English  gentleman  than  to  be  deprived  of  view- 
ing fine  paintings  which,  although  thus  purchased  with  public 
funds,  were  allowed  to  be  stowed  in  the  recesses  of  a  private 
mansion. 

The  scant  funds  appropriated  for  the  British  Museum, 
Wilkes  further  said,  were  inadequate  to  buy  paintings  and 
books.  "This  capital,"  he  went  on,  "after  so  many  ages,  remains 
without  any  considerable  public  library.  Rome  has  the  immense 
collection  of  the  Vatican,  and  Paris  ...  the  greatness  of  the 
King's  Library.  They  are  both  open  at  stated  times,  with  every 
proper  accommodation  to  all  strangers.  The  best  here  is  the 
Royal  Society's,  but  even  that  is  inconsiderable,  neither  is  it 


INSULAR  SELF-SATISFACTION  141 

open  to  the  public,  nor  are  the  necessary  conveniences  af- 
forded strangers  for  reading  and  transcribing.  The  British  Mu- 
seum is  ...  rich  in  manuscripts  but  it  is  wretchedly  poor  in 
printed  books."  * 

Nearly  a  half  century  passed  before  Parliament  was  per- 
suaded into  taking  the  first  steps  for  the  founding  of  the  Na- 
tional Gallery.  It  was  the  bequeathing  of  art  and  other  col- 
lections by  various  individuals  which  forced  the  erection  of  a 
National  Gallery.  In  1805  came  the  Townley  collection  of  an- 
cient sculpture,  and,  subsequently,  his  collection  of  antiquities, 
medals  and  coins;  the  Elgin  marbles  in  1816;  and  various  other 
collections  of  antiquities,  manuscripts,  books  and  minerals.2 
Charges  were  made  in  "The  Edinburgh  Review,"  and  repeated 
in  Parliament,  that  the  British  Museum's  collections — mainly 
natural  history — were  in  a  chaotic  condition.  Parliamentary 
friends  of  the  trustees  denied  these  charges,  but  they  did  not 
deny  the  charge  that  among  the  trustees  there  was  not  a  single 
scientist. 

On  the  Strand,  London,  a  palace  called  Somerset  House  had 
been  built  in  1549,  later  acquired  by  the  Government,  demol- 
ished in  1775;  and  subsequently  the  work  of  rebuilding  it  was 
begun.  No  refutation  was  made  of  John  William  Croker's  state- 
ment in  the  House  of  Commons  that  the  topmost  floor  of  this 
building,  for  thirty  years  remaining  in  a  half-finished  state,  was 
the  out-of-the-way,  unfavorable  place  used  for  exhibiting  paint- 
ings which  were  at  a  disadvantage  in  such  unsuitable  rooms.3 

Such  was  the  lack  of  facilities  for  exhibiting  works  of  art 
and  so  general  had  been  the  absence  of  interest  in  art  itself, 
that  Parliament's  move,  in  1824,  to  create  the  National  Gal- 
lery was  hailed  by  the  few  art  lovers  in  that  body  as  the  incep- 
tion of  a  new  era  in  the  arts  of  Britain.  One  of  these  expres- 
sions of  satisfaction  was  mingled  with  the  hope  of  correspond- 
ing money  returns  flowing  into  England.  Endorsing  the  prospect 
of  developing  a  British  school  of  painting  by  placing  before  na- 
tive students  first-rate  foreign  examples,  Agar  Ellis  interested 
his  fellow  members  by  suggesting  a  result  in  addition  to  the 
advancement  of  Britain's  art  as  such.  He  ingenuously  asked: 
"Might  it  not  be  productive  of  emolument,  even  in  a  pecuniary 
point  of  view?  What  was  it  that  attracted  so  many  travelers  to 


142  AMERICA  STRIKES  BACK 

Italy,  but  the  numerous  works  of  genius  which  were  contained 
in  it?  And  if  a  similar  condition  was  made  in  London,  was  it 
not  likely  that  a  similar  cause  would  produce  a  similar  resort 
of  strangers  to  it?"  4  The  building  of  the  National  Gallery, 
Joseph  Hume  said,  would  at  last  "rescue  the  country  from  the 
disgrace  which  the  want  of  such  an  establishment  had  long  en- 
tailed upon  it."  5  A  resolution  was  adopted  to  expend  £60,000 
for  the  purchase  of  the  Angerstein  collection  of  paintings.  The 
building  erected  for  the  National  Gallery  was,  it  seems,  not 
relished  by  artists,  who  declared  it  "unworthy  of  the  nation."  6 

Among  British  officialdom  generally  and  the  powerful  manu- 
facturing class,  as  also  among  large  groups  influenced  by  fac- 
tory interests,  the  outstanding  concern  in  art  matters  was  domi- 
nantly  utilitarian.  Into  Parliament  flowed  petitions  vigorously 
pleading  that  the  establishment  of  schools  of  design  would  aid 
manufacturers  and — this  was  a  secondary  consideration — im- 
prove public  taste.  No  time  was  lost  by  Parliament  in  giving 
favorable  response;  in  1841  a  grant  of  £10,000  was  voted  for  a 
School  of  Design. 

Quickly,  various  cities  requested  an  allotment  of  funds.  The 
memorial  of  the  municipality  of  Sheffield  read:  "The  proposed 
institution  would  greatly  improve  the  talent  and  skill  of  the 
artisans,  and  the  quality  of  the  staple  productions  of  the  town; 
at  the  same  time  it  would  gratify  and  elevate  the  public  taste 
in  all  branches  of  the  fine  arts.  There  are  probably  few  places 
in  England  where  manufacturers  are  so  likely  to  be  benefited 
by  such  an  institution.  Large  sums  are  yearly  paid  to  distant 
artists,  many  of  them  foreigners,  for  models  and  designs  of 
articles.  The  great  population  of  Sheffield,  110,000,  are  all  in- 
terested in  the  staple  trade  of  the  place.  Many  branches  of 
trade  require  a  knowledge  of  the  arts.  The  cultivation  of  taste 
has  been  too  long  neglected,  to  the  disparagement  of  the  wares 
in  foreign  markets.  A  universal  opinion  pervades  the  town  that 
nothing  could  be  of  more  essential  service  than  the  immediate 
establishment  of  a  School  of  Design."  City  officials,  manufac- 
turers and  clergy  of  Nottingham  made  a  similar  appeal  for  such 
a  school  in  that  city,  "as  calculated  to  be  of  much  use  in  pro- 
moting the  development  and  application  of  the  principles,  ex- 
cellence and  taste  of  patterns  produced  in  the  fabrication  of 


INSULAR  SELF-SATISFACTION  143 

lace  and  hosiery  which  are  the  staple  trades  carried  on  in  this 
vicinity."  Other  manufacturing  cities  submitted  like  applica- 
tions. These,  as  the  Council  of  the  School  of  Design — the  body 
in  charge  of  the  disbursement  of  funds — reported,  were  the 
considerations  influencing  its  decisions.  .  .  .7 

But  to  return  to  Mrs.  Trollope:  Her  book,  said  "The  Knick- 
erbocker Magazine,"  a  New  York  publication,  in  October, 
1833,  "has  been  read,  we  imagine,  by  greater  numbers  of  peo- 
ple in  the  United  States  than  any  book  of  travels  upon  our 
country  that  has  been  published."  By  now,  it  would  seem, 
Americans  were  addicted  to  the  habit  of  curiosity  as  to  what 
foreign  critics  thought  of  them. 

If  some  American  editors  did  not  see  the  true  nature  of  this 
attitude,  at  least  one  British  traveler  grasped  it.  Most  travelers, 
his  article  said,  observed  in  Americans  a  solicitude  to  hear  or 
read  the  opinions  of  strangers  on  American  ways  and  institu- 
tions. Seemingly,  this  anxiety  was  induced  by  a  thirst  for  praise. 
But  in  such  a  display,  the  writer  went  on,  he  could  not  detect 
any  particular  weakness  or  vanity.  "The  extraordinary  progress 
— the  forest  converted  in  the  course  of  a  season  into  a  city — are 
circumstances  calculated  to  cherish  a  great  notion  of  national 
superiority;  but  the  chief  cause  is  the  readiness  with  which 
the  inhabitants  adopt  new  inventions.  Thus  .  .  .  they  con- 
ceive their  knowledge  is  proportionately  advanced  in  all 
things.  .  .  ."8 

The  pettiness  of  foreign  criticism  was  what  exasperated 
Americans.  Of  the  many  tourists  writing  books  on  America,  at 
least  one  recognized  this  fact.  He  pointed  out  the  widespread 
American  feeling  that  British  travelers  did  not  give  attention 
to  the  great  achievements  and  results  in  America;  that  they 
caught  up  and  commented  upon  trifles.  "It  is  the  absence  of  a 
spirit  of  philosophy  generally  in  our  writers,  and  this  affecta- 
tion of  prating  so  like  waiting-gentlewomen,  that  stings  Amer- 
icans." 9  But  often  American  magazine  editors  isolated  them- 
selves from  the  popular  currents.  To  its  regret,  "The  Knicker- 
bocker Magazine"  decided,  such  caricatures  as  Mrs.  Trollope's 
"were  too  much  to  the  public  taste."  And,  instead  of  exhibiting 
a  wholesome  belligerence,  striking  back  hard  and  exposing  con- 
ditions in  Britain,  that  magazine  meekly  accepted  Mrs.  Trol- 


144  AMERICA  STRIKES  BACK 

lope's  strictures:  "Her  rebukes  have  already  done  visible  good. 
May  they  still  do  more." 

The  indignation  of  James  Fenimore  Cooper  was  kindled  by 
the  subservient  spirit  of  a  number  of  American  editors.  To 
Cooper  the  subject  had  long  been  a  rankling  one.  Such  was  the 
fashion  prevalent  among  American  fiction  writers  of  laying 
scenes  and  atmosphere  in  Europe,  that  in  1821,  in  "The  Pref- 
ace" to  his  novel,  "The  Spy,"  Cooper  felt  constrained  to 
elaborate  "several  reasons  why  an  American,  who  writes  a 
novel,  should  choose  his  own  country  for  the  scene  of  his 
story."  While  in  Venice,  in  1828,  Cooper  had  written  a  book, 
"The  Bravo,"  defending  America  from  calumnies.  For  this  he 
had  been  violently  attacked  not  only  in  Britain  and  France 
but  also  by  some  New  York  City  editors. 

In  the  course  of  these  attacks  one  French  publication — "The 
Revue  Encyclopedique" — assuming  the  "social  grossness"  of 
Americans,  asked:  "But  is  it  not  to  the  mother  country  that 
they  owe,  in  a  great  measure,  this  coarseness  of  manners?" 
It  then  summed  up  the  situation,  in  describing  the  campaign  of 
critics  against  America:  "All  the  sins  which  they  can  accumu- 
late against  that  detested  word — Republic — are  lavished  with- 
out rhyme  or  reason;  and  all  the  vices  and  defects  with  which 
they  can  reproach  her  are  ascribed,  without  exception,  to  the 
equality  which  reigns  there.  .  .  .  This  war  ...  is  carried  on 
not  so  much  by  a  regular  attack  on  the  political  institutions  of 
the  Republic  as  by  a  satire  on  the  manners  of  the  people.  .  .  . 
It  is  no  longer  possible  to  deny  that  Americans  are  well  gov- 
erned. .  .  ." 

Now,  addressing  Americans,  Cooper  declared  that  there  was 
no  justification  for  the  custom,  peculiar  to  America,  "of  quot- 
ing the  opinions  of  foreign  nations,  by  way  of  helping  to  make 
up  its  own  estimate  of  the  degree  of  merit  that  belongs  to  its 
public  men."  Manliness  and  independence  of  thought,  he  urged, 
were  necessary  to  render  a  people  great  or  a  nation  respectable. 
The  habit  of  fostering  deference  to  foreign  opinion  "is  dan- 
gerous to  the  very  institutions  under  which  we  live,"  for  the 
war  now  was  that  of  democracy  against  aristocracy.  Crediting 
with  such  dangerous  facility  the  audacious  charges  of  Europe's 
hostile  agents  led  to  this:  "We  appear  in  the  eyes  of  others  like 


INSULAR  SELF-SATISFACTION  145 

a  people  who  do  not  more  than  half  believe  in  the  evidence  of 
our  own  facts,  and  who  are  not  sincere  in  our  professions.  This 
is  one  of  the  reasons  that  Europe  fancies  we  are  living  under  a 
violent  and  rude  democracy.  .  .  ."  10 

At  about  the  same  time  Washington  Irving  also  published  a 
remonstrance.  It  had,  he  wrote,  been  America's  peculiar  lot  to 
be  visited  by  the  worst  kind  of  English  travelers.  While  men 
of  cultivated  minds  had  been  sent  from  England  to  study  the 
manners  and  customs  of  barbarous  nations,  she  depended  upon 
scheming  adventurers  or  shallow,  biased  individuals  as  oracles 
respecting  America.  Although  America,  he  further  wrote,  was 
undertaking  one  of  the  greatest  political  experiments  in  the 
history  of  the  world,  those  purblind  visitors  were  capable  of 
judging  only  the  surface  of  things.  The  conveniences  and  com- 
forts which  they  missed  in  America  were  "all-important  in  the 
estimation  of  narrow  minds,"  whose  motives  in  defaming 
America  were  often  mercenary.  "We  attach  too  much  impor- 
tance to  these  attacks/7  he  went  on.  "The  tissue  of  misrepre- 
sentations attempted  to  be  woven  round  us  are  like  cobwebs 
woven  round  the  limbs  of  an  infant  giant.  Our  country  con- 
tinually outgrows  them." 

Thus  Irving,  in  "The  New  York  Mirror:  Devoted  to  Litera- 
ture and  to  the  Fine  Arts,"  January  24,  1833.  This  periodical 
also  commented  editorially  on  English  travelers:  Americans 
"still  attach  undue  importance  to  their  expressed  opinions.  .  .  . 
It  is,  indeed,  a  strange  thing  that  no  man  can  come  to  America 
to  write  a  book,  with  a  mind  large  enough  to  think  of  some- 
thing more  important  than  fashions  of  eating,  little  peculiari- 
ties of  speech,  unbrushed  hats,  and  the  arrangements  of  the 
toilette  or  dinner  table."  (A  century  later  we  find  a  British 
critic  complaining  of  the  opposite — namely,  of  the  too  great 
comforts  provided  in  America,  compared  with  her  native  land. 
See,  "The  Provincial  Lady  in  America"  by  E.  M.  Delafield, 
novelist,  in  "Harpers  Magazine,"  May,  1934.) 

What  the  American  writers  should  have  done  then  and  later 
was  to  express  themselves  in  facts,  not  in  sentiments.  For 
Britain  furnished  in  abundance  the  facts  as  to  its  own  mate- 
rialistic corruption. 

The  system  of  bribery  in  borough  elections  in  Britain  was 


146  AMERICA  STRIKES  BACK 

general  and  inveterate.  "All  sense  of  shame  was  extinguished 
by  its  prevalence;  the  whole  caste  of  freemen  deemed  it  part 
of  their  privilege  to  be  bought  and  sold  .  .  .  sunk  in  the  lowest 
state  of  venality  and  corruption."  Customers  had  intimidated 
tradesmen;  "landlords  have  driven  whole  streets  of  their  ten- 
antry to  their  poll,  like  droves  of  cattle  to  the  market" ;  tenants 
having  the  hardihood  to  refuse  to  vote  as  directed  were  evicted 
by  the  landlords.11 

In  the  House  of  Commons,  in  1831,  the  great  majority  of 
members  were  owners  of  landed  estates;  of  the  entire  member- 
ship four  were  peers,  ninety-eight  were  sons,  and  one  hundred 
and  fifty-five  near  relatives  of  peers;  sixty-two  members  were 
connected  in  one  way  or  another  with  the  East  India  Company; 
fifty-one  were  engaged  in  trade  and  manufactures;  and  various 
other  groups  of  members  were  bankers,  lawyers  and  military 
and  naval  officers.  A  considerable  number  of  the  members  held 
the  rewards  of  subserviency  by  having  some  profitable  office 
or  emolument  or  the  endowment  of  a  pension. 

Agitation  for  the  reform  of  the  electoral  system  was  met  by 
the  cry  that  reform  meant  revolution  and  a  war  against  prop- 
erty. The  story  of  the  chartist  riots  leading  to  Parliament's 
yielding  to  the  reform  demands  is  well  known.  But  the  sequel 
is  barely  known.  Bribery  at  elections  continued;  frequently 
thereafter  the  outcry  made  by  public-spirited  men  caused  dur- 
ing the  next  half-century  the  introduction  and  passage  of  a  suc- 
cession of  Corrupt  Practices  Acts. 

In  America  there  was  and  remained  strong  prejudice,  par- 
ticularly against  Catholics,  but  so  far  as  law  was  concerned  no 
barriers  existed  against  persons  of  any  religious  creed  except 
that  in  a  few  States  the  governor  had  to  be  a  Protestant.  Vari- 
ously during  and  after  the  American  Revolution,  laws  which 
hitherto  disfranchised  and  disqualified  Catholics,  Jews  and 
some  other  faiths  had  been  repealed. 

This  extension  of  religious  liberty  in  America,  novel  at  the 
time,  was  in  marked  contrast  to  the  bigotry  in  Britain,  where 
old  discriminatory  laws  long  encumbered  the  statute  books  and 
were  enforced.  And  it  was  while  they  were  still  being  enforced 
that  British  critics  were  railing  at  America's  bigotry.  Not  un- 
til 1829  did  Parliament  consent  to  admit  a  Roman  Catholic  to 


INSULAR  SELF-SATISFACTION  147 

its  membership,  and  it  was  only  shortly  before  that  time  that 
Parliament  could  be  persuaded  to  pass  an  act  prescribing  a 
new  oath  which  a  Catholic  could  take  with  self-respect.  Elected 
to  the  House  of  Commons,  the  Catholic  Earl  of  Surrey  took  his 
seat  on  May  6,  1829,  and  a  note  to  the  "Debates"  recorded: 
"The  circumstance  occasioned  some  sensation,  and  the  noble 
earl  was  warmly  greeted  by  his  many  friends."  12  Full  rights 
of  citizenship  were  only  grudgingly  granted  in  Britain  to  dis- 
senters from  the  established  church,  to  Unitarians  and  to  Catho- 
lics. Frequently,  in  the  House  of  Commons,  advocates  of  re- 
ligious liberty  pointed  to  examples  of  America,  France  and 
Holland  as  establishing  the  perfect  competency  of  Jews  to  per- 
form functions  of  civil  and  military  offices.  Obstinately  did  the 
majority  of  Parliament  refuse  to  repeal  laws  denying  full  rights 
to  Jews.  Finally,  in  1850,  electors  of  London's  financial  quarter 
resolved  to  wait  no  longer.  They  requested  their  elected  mem- 
ber, Baron  Rothschild,  to  present  himself  in  the  House  of 
Commons  and  offer  to  take  his  seat.  He  did  so. 

Open  ways  of  corruption  in  America  were  more  than  matched 
by  the  insidious  methods  in  Britain.  When  the  London  & 
Birmingham  Railway  was  projected,  the  owners  of  estates  and 
canal  proprietors  made  common  cause  against  that  enterprise 
as  well  as  against  other  railways.  In  all  of  the  counties  through 
which  the  London  Birmingham  Railway  would  pass,  public 
meetings  were  incited  and  the  project  was  denounced  as  chi- 
merical and  as  destructive  to  the  estates  and  to  the  nobility. 

In  1832,  a  bill  for  granting  to  the  company  a  charter  and  a 
right  of  way  came  before  a  committee  of  the  House  of  Lords. 
The  railway's  promoters  were  in  consternation  at  finding 
avowed  opponents  of  the  measure  filling  the  committee.  The 
bill  was  thrown  out.  It  was  re-introduced  in  the  next  year  in  a 
Parliament  supposedly  pledged  to  principles  of  reform.  The 
perplexing  sight  was  then  witnessed  of  the  bill  smoothly  pass- 
ing both  houses  and  with  such  slight  opposition  that  the  trans- 
action for  a  time  was  inexplicable.  The  mystery  was  solved  by 
the  company's  directors  issuing  a  circular.  In  this  it  was  stated 
that  negotiations  of  the  directors  with  the  most  influential  of 
their  opponents  had  thoroughly  conciliated  the  noble  lords  and 
other  large  landed  proprietors.  The  means  found  to  conciliate 


148  AMERICA  STRIKES  BACK 

them  was  by  trebling  the  estimate  of  land  acquired  by  the  rail- 
way company  and  paying  the  owners  a  munificent  £750,000 
for  land  originally  appraised  at  £2 50,000. 13 

In  the  "reformed"  Parliament  of  1833  advocates  of  popular 
education  met  with  rebuffs  and  defeat;  as  a  sop  intended  to 
express  its  contempt  for  the  measure,  Parliament  voted  the 
ridiculously  paltry  sum  of  £20,000  for  national  education.  Six 
years  later,  when  another  move  was  made  in  Parliament  to 
raise  the  bounty  to  £30,000,  Lord  Ashley,  afterward  the  Earl 
of  Shaftesbury,  denounced  in  the  House  of  Lords  the  plan  of 
national  education  as  hostile  to  the  Constitution,  to  the  Church, 
and  to  revealed  religion  itself.  Most  piously  did  the  Bishop  of 
Exeter  proclaim  that  as  a  class  the  poor  were  assigned  by 
Providence  to  life's  laborious  occupations,  and  that  it  was  not 
to  be  expected  that  they  should  be  able  largely  to  cultivate  their 
intellects.  There  were  similar  other  fervid  protests  in  the  House 
of  Lords  which  voted  overwhelmingly  against  the  motion.  Dur- 
ing this  period  England  was  full  of  absentee  clergymen  who, 
while  themselves  drawing  fat  salaries,  made  the  curates  do 
their  work,  most  of  the  curates  receiving  a  stipend  less  than 
that  paid  to  a  country  carpenter  or  to  a  servant.14 

Contemporaneously  with  the  publication  of  Mrs.  Trollope's 
book  and  of  other  books  defaming  America,  British  official  and 
other  reports  were  giving  glimpses  into  social  and  industrial 
evils  in  Britain.  English  and  Scotch  factories  were  crowded 
with  children,  some  six,  many  seven  and  eight,  and  the  greater 
number  nine  years  of  age.  Hours  of  labor  were  from  eleven  to 
thirteen.  In  the  small  mills  of  Scotland  children  were  strapped 
and  beaten.  The  investigating  commission  thus  reporting  de- 
scribed the  intense  effects  of  labor  fatigue  upon  children  in 
stunting  their  growth,  causing  pains  in  limbs,  and  so  exhaust- 
ing them  that  often  they  were  unable  to  move  or  eat.  Accidents 
in  factories  to  children  and  adults  were  frequent.  In  the  big 
factories  there  was  but  one  privy,  it  filled  the  place  with  stinks, 
was  used  indiscriminately  by  men,  women  and  children,  and 
conduced  to  immorality.15  America  had  its  child  labor  and 
other  factory  abominations,  but  not  as  bad  nor  as  persistent 
as  those  in  Britain — a  fact  to  which  reference  was  made  in  a 
debate  in  Parliament  in  1847  on  a  Factories  Bill  discussion 


INSULAR  SELF-SATISFACTION  149 

which  revolved  around  the  high  mortality  among  women  and 
children  in  British  factories.16 

Investigations  by  physicians  of  the  Poor  Law  Commission- 
ers and  by  other  bodies  revealed  the  slum  horrors  in  English 
cities.  In  Liverpool,  in  1839,  an  estimated  35,000  to  40,000 
persons — one-fifth  of  the  town's  whole  population — existed  in 
nearly  8,000  damp  and  dirty  cellars.  In  Manchester  and  Sal- 
ford  a  considerable  portion  of  the  population  inhabited  cellars ; 
and  of  37,000  workers'  abodes  examined,  more  than  18,000 
were  shabbily  furnished  and  more  than  10,000  altogether  desti- 
tute of  furniture.  In  Bury,  having  a  population  of  20,000,  the 
dwellings  of  3,000  workers'  families  were  visited;  in  773  of 
these  places  three  and  four  members  of  the  family  slept  in 
one  bed,  and  in  hundreds  of  other  places  the  number  occupying 
a  bed  ranged  from  four  to  six.  In  Leeds  there  was  similar  con- 
gestion. Lack  of  sewers  and  other  sanitary  arrangements  in 
these  towns,  and  the  disgustingly  filthy  state  of  the  streets,  were 
loathsome  features.17 

Frequent  epidemics  of  disease  scourged  British  factory 
cities;  and  it  was  finally  the  cholera  epidemic  of  1831  which 
upset  the  complacency  of  the  British  upper  classes,  among 
whose  ranks  the  outspreading  disease  took  its  toll.  Long  ston- 
ily indifferent  to  the  terrible  living  conditions  of  the  sub- 
merged poor,  the  scared  higher  classes  now  came  to  a  realiza- 
tion of  their  own  susceptibility  to  contagion,  and  were  willing 
to  listen  to  the  expedient  need  of  sanitary  reforms.  But  the  exe- 
cution of  these  was  tardy,  and  in  1849  there  came  another 
visitation  of  cholera  which,  sweeping  from  the  filthy  alleys  and 
crowded  lodging  houses,  encircled  the  neighboring  mansions. 

A  Parliamentary  Select  Committee  investigating  drunken- 
ness in  Britain  submitted  a  long  report.  As  a  reaction  against 
immoderate  drinking,  there  was  now  a  movement  tending  to 
temperance.  The  committee  pointed  out  that  while  in  the  Amer- 
ican navy  and  army  the  supplying  of  liquor  had  been  discon- 
tinued, "one-sixth  of  the  effective  strength  of  the  British  navy 
and  a  much  greater  proportion  of  the  British  army  was  as 
much  destroyed  by  the  effects  of  intoxication  as  if  destroyed 
in  battle."  The  committee  told  how  seven  hundred  vessels  in 
the  American  merchant  marine  sailed  with  no  liquor  aboard 


150  AMERICA  STRIKES  BACK 

except  for  medicinal  purposes;  they  thus  obtained  freights  in 
preference  to  British  vessels.  Of  the  inordinate  drinking  by 
English  ladies  and  gentlemen — the  ladies  upon  arising  began 
the  day  by  drinking  healths  in  brandied  wines,  and  both  sexes 
pledged  healths  in  liquor  all  day  long — this  fact  was  brought 
out:  "The  secret  cause  of  Americans  holding  faster  to  temper- 
ance obligations  ...  is  that  they  have  not  the  hundredth  part 
of  the  moral  temptations  of  etiquettes  and  compliments  solicit- 
ing them  at  every  corner;  in  Britain  there  is  an  unhappy  pro- 
pensity of  ladies  and  gentlemen  to  interweave  courtesy  and 
strong  drink."  And  further:  "The  practices  of  the  upper  ranks 
have  ever  been,  and  are  likely  to  be,  the  spring  from  which 
the  fashions  and  etiquettes  of  the  lower  are  originally  derived." 
The  sum  of  £20,000,000  it  was  estimated,  was  expended  an- 
nually for  liquor  in  Britain.18 

The  findings  of  another  Parliamentary  committee  disclosed 
some  appalling  results  of  the  demoralized  condition  of  the  work- 
ing class.  This  committee  was  investigating  combinations  (or- 
ganizations) of  workingmen,  but  the  testimony  brought  out 
many  associated  facts. 

Archibald  Alison,  a  magistrate,  and  his  brother,  a  professor 
of  medicine  in  the  University  of  Edinburgh,  had  spent  a  life- 
time studying  the  conditions  of  the  poor.  Dr.  Alison  considered 
that  poverty  and  consequent  recklessness  inevitably  induced 
prostitution  among  many  Scotch  girls  at  the  age  of  puberty. 
"A  large  proportion  of  these  females,"  testified  Magistrate  Ali- 
son of  Glasgow  factory  girls,  "I  should  say  three-fourths  of 
them  after  the  age  of  puberty,  I  do  not  say  become  mothers, 
for  they  have  too  much  intercourse  with  men  for  that,  but 
they  lose  their  virginity  before  they  are  twenty."  And  he  went 
on:  "I  have  observed  in  the  cases  that  have  come  before  me, 
and  in  the  judicial  declarations  of  prisoners,  that  the  intercourse 
of  men  and  women  in  the  manufacturing  ranks  in  Glasgow  is 
coarse  and  loose  to  a  degree  that  is  indescribable.  I  find  con- 
tinual cases  of  separation  between  husband  and  wife  in  con- 
sequence of  the  avowed  and  open  and  undisguised  living  of 
the  husband  with  another  woman,  and  of  the  wife  with  another 
man.  I  find  the  intercourse  of  the  sexes  going  on  almost  in  an 
indiscriminate  way  in  rooms,  before  a  number  of  witnesses.  ID 


INSULAR  SELF-SATISFACTION  151 

short,  there  is  a  degree  of  coarseness  subsisting  between  the 
sexes  which  no  person  without  practical  acquaintance  would 
believe." 19 

Parliament  insisted  upon  its  right  to  prevent  the  publication 
of  such  evidence  in  newspapers.  Reminding  the  House  of  Com- 
mons, on  April  21,  1837,  that  in  1832  the  publisher  of  "The 
Dublin  Evening  Mail"  has  been  arraigned  before  the  bar  of 
the  House  of  Commons  for  printing  testimony,  Lord  John  Rus- 
sell notified  the  House  of  the  culpability  now  of  another  news- 
paper. The  Select  Committee  on  the  Poor  Law  Amendment 
complained  that  portions  of  the  evidence  and  parts  of  the  docu- 
ments produced  before  that  committee  had  been  published  in 
"The  True  Sun."  One  House  of  Commons  member — D  .W.  Har- 
vey— ridiculed  the  secrecy  demanded  and  the  composition  of 
the  committee  which,  he  said,  represented  men  of  aggregated 
property  leagued  against  "all  that  is  pitiable  and  miserable  in  the 
land  sunken  alike  by  ignorance  and  extreme  poverty."  All  evi- 
dence, Harvey  urged,  should  be  published  in  a  cheap  form  and 
widely  disseminated.  Joseph  Hume  told  how  he  had  been  a 
member  of  the  Finance  Committee  which  heard  the  evidence 
given  by  the  Duke  of  Wellington  on  the  military  expenses  of  the 
colonies.  Hume  expressed  his  regret  that  the  evidence  had  been 
kept  secret;  he  was  sure  that  had  it  been  published  an  expendi- 
ture of  £2,000,000  on  the  canals  in  Canada  would  have  been 
prevented.  These  protests  were  disregarded.  By  an  overwhelm- 
ing vote  the  House  of  Commons  adopted  this  resolution: 

"That,  according  to  the  undoubted  privileges  of  this  House, 
and  for  the  due  protection  of  the  public  interest  the  evidence 
taken  by  any  Select  Committee  of  this  House,  and  the  docu- 
ments presented  to  such  Committee,  and  .which  have  not  been 
reported  to  the  House,  ought  not  to  be  published  by  any  Mem- 
ber of  such  Committee,  nor  by  any  other  person."  20 


CHAPTER   XIII 
A  CONFLICT  OF  OPINIONS 

POSSESSED  of  qualifications  as  a  student,  lawyer  and  traveler, 
Alexis  de  Tocqueville  had  been  sent  by  the  French  Government 
to  America  in  1831  to  study  its  penitentiary  systems.  He  did 
not,  however,  confine  his  view  to  this  special  field;  he  also  ap- 
plied himself  to  a  survey  of  America's  social  and  political  insti- 
tutions. His  book,  "Democracy  In  America,"  was  published  in 
France  and  later  translated  and  brought  out  in  other  countries. 

Tocqueville  clearly  saw  the  life-spirit  of  the  American  people 
whose  passion,  as  a  whole,  was  that  of  aspiration  toward  equal- 
ity. "Nothing  struck  me  more  forcibly  than  the  general  equality 
of  conditions.  I  readily  discovered  the  prodigious  influence 
which  this  primary  fact  exercises  on  the  whole  course  of  so- 
ciety. .  .  .  The  more  I  advanced  in  the  study  of  American 
society,  the  more  I  perceived  that  the  equality  of  conditions  is 
the  fundamental  fact  from  which  all  others  seem  to  be  derived, 
and  the  central  point  at  which  all  my  observations  constantly 
terminated."  Aristocracy  had  been  completely  disabled.  Laws 
abolishing  entail  and  primogeniture  had  dispersed  the  old  great 
estates.  The  last  traces  of  hereditary  ranks  and  distinctions  had 
been  destroyed.  Democracy  was  all-powerful.  America's  social 
state  presented  a  most  extraordinary  phenomenon.  In  point 
of  fortune  and  intellect,  men  were  seen  there  on  a  greater  equal- 
ity than  in  any  other  country  or  in  any  age  recorded  by  history. 

Thus  Tocqueville  went  on.  He  might  have  added  that  the 
plane  of  women  was  also  higher.  The  radical  Frances  Wright, 
evangelist  for  women's  rights,  had  noted  in  her  book  published 
in  1821,  that  in  a  social  sense  many  of  the  prejudices  against 
women  prevailing  in  Europe  had  been  abandoned  in  America. 
"The  youth  of  both  sexes  here  enjoy  a  freedom  of  intercourse 
unknown  in  the  older  and  more  formal  nations  of  Europe.  .  .  . 
The  women  are  assuming  their  place  as  thinking  beings,  not 

152 


A  CONFLICT  OF  OPINIONS  153 

in  despite  of  the  men,  but  chiefly  in  consequence  of  their  en- 
larged views  and  exertions  as  fathers  and  legislators.  .  .  .  The 
liberty  here  enjoyed  by  the  young  women  often  occasions  some 
surprise  to  foreigners."  l 

By  equality  of  conditions,  Tocqueville  explained,  he  did  not 
mean  that  there  was  any  lack  of  wealthy  individuals  in  America. 
At  this  point  he  harped  upon  the  customary  strain  of  critics: 
"I  know  of  no  country,  indeed,  where  the  love  of  money  has 
taken  a  stronger  hold  on  the  affections  of  men  and  where  a  pro- 
founder  contempt  is  expressed  for  the  theory  of  the  permanent 
equality  of  property.  But,"  he  hastened  to  add,  "wealth  circu- 
lates with  inconceivable  rapidity,  and  experience  shows  that 
it  is  rare  to  find  two  succeeding  generations  in  the  full  enjoy- 
ment of  it."  In  aristocratic  governments,  he  pointed  out  in 
another  part  of  his  book,  the  heads  of  affairs  were  men  already 
rich,  whereas  "in  democracies  statesmen  were  poor  and  had  to 
make  their  fortunes."  As  a  matter  of  fact,  very  few  American 
statesmen  ever  made  any  fortunes;  at  death  they  left  relatively 
little;  thus  Alexander  Hamilton,  who  made  many  rich,  himself 
died  poor.  Public  officials  in  America  were  often  bribed,  but 
it  was  the  capitalists  bribing  them  who  acquired  the  corpora- 
tion charters  and  the  natural  resources  and  reaped  great  for- 
tunes. 

Seeing  evidences  of  corruption  in  America,  Tocqueville  did 
not  attempt  to  exonerate  his  own  France.  Most  of  the  men  who 
had  administered  France's  public  affairs  during  the  forty  pre- 
ceding years,  he  wrote,  had  been  accused  of  corruptly  making 
their  fortunes — an  accusation  not  without  substantial  founda- 
tion. But  the  bribery  of  voters,  he  noted,  was  almost  unknown 
in  France,  while  in  England  it  was  notorious;  in  the  United 
States  he  had  never  heard  of  a  man  charged  with  spending  his 
wealth  in  corrupting  the  populace.2  He  might  have  looked 
deeper  into  this  phase.  The  practice,  common  among  British 
manufacturers,  of  intimidating  their  employes  at  elections,  had 
perhaps  no  equal  in  the  United  States  or  was  not  so  directly 
done.  It  was  nevertheless  frequent  here,  in  campaigns  in  which 
the  tariff  was  an  issue. 

Necessarily,  Tocqueville's  view  was  of  America's  social  and 
political  accomplishments — spectacular  innovations,  when  com- 


154  AMERICA  STRIKES  BACK 

pared  to  Old  World  standards  and  conditions.  He  was  concerned 
with  what  he  saw,  not  in  foretelling  probabilities.  But  in  seeing 
the  pervasive  passion  for  equality  he  saw  profoundly.  Ameri- 
can democracy,  Tocqueville  warned  Europe,  was  rapidly  trans- 
planting itself  to  the  Old  World  and  rising  into  power  there. 
This  warning  was  unnecessary;  European  upper  classes  well 
sensed  the  danger.  And  now  was  seen  a  scurrying  to  kill  the 
influence  of  Tocqueville's  book  by  distorting  its  meaning  and 
point.  Taking  that  book  as  a  text,  publication  after  publication, 
writer  after  writer  in  Europe,  mendaciously  used  it  as  proof 
that  the  reign  of  mediocrity  and  vulgarity  was  ominously  be- 
ginning; the  leveling  of  society  would  abolish  great  souls;  it 
would  supplant  the  beautiful  with  the  useful;  practical  economy 
would  be  substituted  for  religion;  and  a  democratic  age  would 
crush  intellect,  which  was  purely  aristocratic. 

In  these  assaults  the  dominant  theme  was,  as  usual,  the  merce- 
nary character  of  the  American  people.  Thus  a  titled  German  vis- 
itor on  America:  "The  moveable  moneyed  aristocracy  of  our 
times  I  consider  the  greatest  enemy  of  mankind.  ...  It  enslaves 
the  people  .  .  .  introducing  everywhere  the  most  sordid  prin- 
ciples of  selfishness,  to  the  exclusion  of  every  noble  and  disin- 
terested sentiment.  .  .  ." 3  Another  German,  Frederick  von 
Raumer,  Professor  of  History  in  the  University  of  Berlin,  also 
emitted  a  book  on  American  vulgarity  and  on  other  things 
detested  by  him,  one  of  them  the  lack  of  any  class  separation 
of  passengers  in  American  railway  cars  and  stage  coaches,  as 
in  Europe — an  outrage,  in  his  estimation,  past  condoning.4 

A  leading  modern  German  historian,  not  unrenowned  as  a 
eulogist  of  his  own  country,  has  given  an  account  of  the  state 
of  Prussia  at  this  time.  A  bureaucracy  ruled  supreme,  says 
Treitschke.  The  masses  "blindly  did  what  the  authorities  or- 
dered." Dominant  philosophical  writers  did  their  utmost,  "by 
the  use  of  an  incomprehensible  argot,"  to  make  themselves  ap- 
pear surpassing  prodigies  of  thought,  and  "the  Berliners  were 
fond  of  boasting  of  their  town's  intellectual  brilliancy."  The 
position  of  men  of  intellect  "was  not  high  in  this  land  of  courtly 
and  bureaucratic  divisions  of  caste."  Germans  with  political 
ideals  had  to  go  to  America  to  realize  them.5  Then  came  the 
1848  uprising — called  revolution — which,  another  German 


A  CONFLICT  OF  OPINIONS  155 

historian  tells,  saw  the  mob  do  as  it  liked,  because  the  people 
were  accustomed  to  taking  orders — and  for  a  time  no  official 
dared  to  command  or  forbid!  6 

Not  long  after  von  Raumer  and  his  compeer  had  published 
their  attacks  on  America's  sordidness,  a  great,  self -sprung 
money  mania  swept  Germany.  Capitalist  development  of  that 
country  had  begun  in  earnest  and  in  force.  After  many  years 
of  succumbing  to  the  crushing  competition  of  British  industrial- 
ism which  flooded  it  with  goods,  Germany  now  set  out  to  organ- 
ize its  own  industries  on  a  large  stock-issuing  basis.  There  was 
seething  speculation  in  shares  of  cotton  mills,  sugar  refineries, 
banks,  railways  and  many  other  enterprises.  Such  were  the 
attractions  of  profit  from  investment  or  speculation  that,  be- 
tween 1853  and  1857,  the  issue  of  shares  in  new  banks  alone 
amounted  to  200,000,000  thalers;  new  railway  shares  reached 
140,000,000  thalers;  in  shares  of  other  concerns  there  was  a 
similar  increase.  In  the  twenty  years  after  1851  more  than  two 
hundred  companies,  with  a  total  capital  of  2,404,000,000  marks, 
were  organized  in  Germany.7 

On  through  the  1830's  and  '40  Js  the  inundation  of  books  on 
America  was  such  that  it  would  be  supererogatory  to  mention 
more  than  a  few.  Harriet  Martineau's  "Society  in  America" 
was  a  favorable  account,  perhaps  somewhat  too  colored  by  her 
enthusiasm.  But  if  one  is  interested  in  the  proportions  a  writing 
fashion  can  assume,  it  is  only  necessary  to  unearth  the  many 
examples,  long  since  forgotten  and  buried,  of  productions  pur- 
porting to  inform  Europeans  on  America.  Some  of  these  books, 
however,  offered  a  new  point  or  two.  To  differentiate  his  book 
from  the  common  run,  and  to  give  it  distinctive  weight,  one 
British  author  took  pains  to  assure  the  public  that  he  was  no 
tourist  but  a  person  who  had  actually  lived  in  America  for 
years.  American  business  men,  he  wrote,  sought  big  stakes  in 
transactions ;  but,  he  asked,  did  this  prove  them  more  grasping 
than  the  French,  who  excelled  in  the  minutise  of  frugality  and 
who,  of  a  little  money,  always  managed  to  hold  on  to  some?  8 

On  the  other  hand,  Michael  Chevalier  saw  American  trading 
propensities  as  an  enlargement  of  the  English.  Sent  to  America 
in  1834  by  Thiers,  French  Minister  of  the  Interior,  to  inspect 
public  works,  Chevalier  did  not  allow  himself  to  miss  the  oppor- 


156  AMERICA  STRIKES  BACK 

tunity  of  writing  a  book  on  America.  At  the  outset,  to  prove 
his  own  impartial  judgment,  he  pronounced  almost  all  English 
travelers  in  America  afflicted  with  obliquity;  "they  have  seen  a 
great  deal  that  was  bad  and  scarcely  anything  good;  the  por- 
trait they  have  drawn  of  America  and  the  Americans  is  a  carica- 
ture, which,  like  all  good  caricatures,  has  some  resemblance  to 
the  original."  He  then  relieved  himself  of  this  generalization, 
by  no  means  unsupported  by  circumstance:  "All  English  trav- 
elers in  America  have  belonged  to  the  aristocracy  by  their  con- 
nections or  their  opinions,  or  were  aspiring  to  it,  or  aped  its 
habits  and  judgments  that  they  might  seem  to  belong  to  it."  9 

Chevalier  was  much  impressed  by  the  absence  in  America 
of  women  laboring  in  the  field.  Thus,  said  he,  they  escaped  "that 
hideous  ugliness  and  repulsive  coarseness  of  complexion  which 
toil  and  privation  everywhere  else  brings  upon  them."  He 
viewed  American  democracy  as  imperious  and  overbearing 
toward  other  nations,  its  foreign  policy  as  egoistic,  and  its 
aggrandizing  pretensions  as  unbounded.  He  pronounced  Ameri- 
cans absorbed  in  material  pursuits.  "It  is  certain  that  the 
Americans  are  an  exaggeration  of  the  English,  whom  Napoleon 
used  to  call  a  nation  of  shopkeepers.  The  American  is  always 
bargaining;  he  always  has  one  bargain  afoot,  another  just 
finished  and  several  more  in  meditation.  ...  At  the  bottom, 
then,  of  all  that  an  American  does,  is  money,  beneath  every 
word  money."  Chevalier,  however,  conceded  American  munifi- 
cence.10 

It  was  droll  that  another  visitor  also,  British  and  a  most 
severe  critic  of  America,  professed  to  see  in  American  activity 
a  distinct  English  trait.  Whatever  was  notable  in  America  was 
of  English  derivation,  according  to  Frederick  Marryatt.  A  cap- 
tain in  the  British  Navy,  Marryatt  had  left  the  service  in  1830 
to  devote  himself  to  novel  writing.  While  he  was  touring 
America,  the  bustle  he  witnessed  everywhere  admitted  of  no 
dismissal  or  denial.  In  his  book  he  thus  treated  it:  "Now  all 
this  activity  is  of  English  origin;  and  were  England  expanded 
into  America,  the  same  results  would  then  be  produced.  To  a 
certain  degree  the  English  were  in  former  times  what  the  Ameri- 
cans are  now;  and  this  is  what  has  raised  our  country  so  high 
in  the  scale  of  nations."  ll 


A  CONFLICT  OF  OPINIONS  157 

In  a  slightly  different  form,  Marryatt's  characterizations  of 
Americans  were  the  same  as  those  of  the  prior  line  of  British 
critics.  We  hear  the  old  strain  of  the  demoralizing  effects  of  a 
democratic  form  of  government.  And  so,  too,  the  parrot-like 
repetition  of  the  ubiquitous  worship  of  money.  Impervious  to 
the  plain  fact  that  in  Britain  many  successful  business  men 
bought  peerages  and  other  honors,  Marryatt  pictured  Ameri- 
cans in  this  wise:  "Honors  of  every  description,  which  stir  up 
the  soul  of  men  to  noble  deeds — worthy  incitements — they 
have  none.  The  only  compensation  they  can  offer  for  services 
is  money;  and  the  only  distinction — the  only  means  of  raising 
himself  above  his  fellows  left  to  the  American — is  wealth; 
consequently  the  acquisition  of  wealth  has  become  the  great 
spring  of  action.  But  it  is  not  sought  after  with  the  avarice  to 
hoard,  but  with  the  ostentation  to  spend.  .  .  .  The  only  great 
avenue  open  to  all  ...  is  that  which  leads  to  the  door  of 
Mammon.  .  .  .  Having  no  aristocracy,  no  honors,  no  distinc- 
tions to  look  forward  to,  wealth  has  become  the  substitute,  and 
with  few  exceptions,  every  man  is  great  in  proportion  to  his 
riches." 

Other  condemnations,  made  trite  by  many  a  previous  book 
and  article,  were  repeated  by  Marryatt  and  given  the  color  of 
fresh  observations.  American  educational  methods,  he  declared, 
caused  insubordination  and  bred  national  conceit;  "monarchy 
is  derided,  the  equal  rights  of  men  declared;  all  is  invective, 
uncharitableness  and  falsehood."  Frequently,  to  heighten  his 
accusation  of  American  money  lust  and  the  scoundrelly  com- 
position of  America's  foremost  financial  and  commercial  city, 
he  took  up  an  old  device  made  popular  by  refugee  loyalists 
from  America  in  books  written  during  and  after  the  American 
Revolution.  One  after  another,  those  refugees  had  pleased  the 
British  and  consoled  themselves  by  representing  Americans  as 
the  scum  of  the  earth.12  And  now,  forgetting  for  the  moment 
the  boast  of  his  country's  Government  that  its  people  were  the 
most  law-abiding  and  its  administration  of  justice  was  the 
strictest  and  most  effective  to  be  found  anywhere  in  the  world, 
Marryatt  presented  this  picture:  "Every  scoundrel  who  has 
swindled,  forged,  or  robbed  in  England,  or  elsewhere,  makes 
his  escape  to  New  York.  Every  pickpocket  who  is  too  well 


158  AMERICA  STRIKES  BACK 

known  to  the  English  police,  takes  refuge  here.  In  this  city 
they  all  concentrate  ...  the  criminal  inpouring  of  the  Con- 
tinental dregs  .  .  .  outcasts  from  the  society  of  the  Old 
World.37 13 

If  many  criminals  succeeded  in  fleeing  from  Britain,  the 
police  records  there  did  not  show  it.  In  England  and  Wales 
alone,  in  each  of  the  years  from  1834  to  1838  inclusive,  there 
was  an  average  of  21,000  commitments  for  crime.  Not  until 
1832  had  capital  punishment  been  abolished  in  Britain  for 
cattle  and  sheep  stealing,  petty  larceny  in  a  house,  coining  and 
forgery.  Until  1833  British  law  ordered  death  for  housebreak- 
ing;  until  1835  for  sacrilege  and  letter  stealing  by  post  office 
employes.  In  1837  capital  punishment  was  effaced  for  all  of- 
fences except  murder,  burglary  with  violence,  rape,  unnatural 
offences,  riot,  embezzlement  by  Bank  of  England  employes, 
piracy  and  high  treason.  After  the  change  in  1837  death  sen- 
tences were  ten  times  less  than  in  previous  times.  In  1841 
Britain  eradicated  capital  punishment  for  rape  and  rioting. 
Captain  Marryatt  was  not  even  slightly  acquainted  with  the 
criminal  statistics  of  his  own  country.  A  large  number  of  of- 
fenders there  were  not  in  any  sense  intelligent  or  quick-witted; 
more  than  a  third  sentenced  from  1836  to  1838  were  unable  to 
read  and  write.14 

After  Marryatt  there  came  to  America  a  more  distinguished 
visitor — one  whose  celebrity  has  lasted.  This  was  the  novelist 
Charles  Dickens. 

Dickens  assailed  America's  press  as  lacking  respectability 
and  as  licentious.  Accustomed  to  the  timidity  and  constraint  of 
English  newspapers  and  to  their  deference  to  titles,  office  and 
wealth,  he  was  repelled  by  the  unrestrained  spirit  of  criticism 
in  American  newspapers.  In  partisan  matters  this  criticism,  it 
was  true,  often  descended  to  blackguardly  extremes.  Neverthe- 
less, in  its  whole  social  effect,  it  was  of  a  probing,  beneficial 
order  unknown  in  Europe:  no  man's  position  or  riches  gave 
him  immunity.  But,  according  to  Dickens,  this  free  and  full 
criticism  in  America  incited  jealousy  and  distrust  of  public 
men,  caused  worthy  men  to  shrink  from  entering  legislative 
life,  and  produced  a  disgraceful  class  of  candidates.  It  resulted 


A  CONFLICT  OF  OPINIONS  159 

in  popular  fickleness;  American  "inconstancy  has  passed  into 
a  proverb."  The  charge  of  volatility,  applied  by  British  writers 
to  the  French,  now  was  extended  to  Americans. 

As  a  former  reporter,  Dickens  had  good  reason  to  know  the 
disdain  with  which  the  British  Parliament  treated  representa- 
tives of  the  press.  Certainly,  the  attitude  of  British  newspapers 
toward  politicians  did  not  win  for  them  any  regard.  The  only 
accommodation  allowed  by  Parliament  to  reporters,  when  for 
one  reason  or  another  they  had  to  withdraw  from  the  galleries, 
was  a  tiny  apartment,  not  much  larger  than  a  closet,  which,  by 
a  Parliamentary  fiction,  was  called  a  "drawing  room."  When 
the  nineteenth  century  was  verging  toward  midway,  every 
London  morning  newspaper  employed  a  staff  of  short-hand 
reporters.  Only  a  few  years  after  Dickens  wrote  his  "Notes" 
on  American  legislators,  a  newly-established  London  magazine, 
of  popular  sympathies,  related  that  London  newspaper  men 
reporting  Parliament's  proceedings  were  all  educated  men; 
some  were  lawyers,  others  authors,  and  still  others  of  various 
professions.  "Many  of  them  are  vastly  superior  in  every  in- 
tellectual attainment  to  the  great  mob  of  members  whose  prosy 
speeches  they  yawn  over  as  they  report."  15 

The  American  Congress  was  largely  composed  of  lawyers 
and  farmers,  with  a  sprinkling  of  tradesmen,  manufacturers  and 
nondescripts.  On  the  whole  they  were  men  of  ability;  or  if 
some  did  not  have  that  quality,  they  had  a  fair  share  of  common 
sense.  That  spread-eagle  speeches  were  common  in  Congress; 
that,  indeed,  speeches  were  printed  which  were  never  delivered; 
that  members  took  the  greatest  liberties  in  punctuating  their 
published  speeches  with  generous  "applause"  which  nobody 
had  ever  heard — all  of  this  and  more  did  not  vitiate  the  fact 
that  in  caliber  and  virility  Congress  compared  more  than  well 
with  European  legislative  bodies.  If  in  Congress  members  were 
actuated  by  partisan  policies,  Parliamentary  members  were 
not  less  so,  following  the  motions  of  leaders  like  flocks  of  sheep. 

In  France  hereditary  legislative  rights  had  been  abolished 
in  1831,  when,  to  secure  the  passage  of  a  bill  in  the  House  of 
Peers,  the  Government  created  thirty-six  new  peers,  thus  giving 
a  sufficient  majority  for  extinguishing  purposes.  And  what  was 
the  state  of  the  British  House  of  Lords  in  Dickens'  time?  The 


160  AMERICA  STRIKES  BACK 

London  magazine  previously  cited  told  of  the  difference  in 
atmosphere  between  the  noisy  Commons  and  the  somnolent 
House  of  Lords,  carpeted,  cushioned  and  wax-lighted.  "Upon 
the  woolsack,  just  in  front  of  the  throne,  sits  the  Lord  Chancel- 
lor, seemingly  half  asleep ;  at  the  table,  the  Earl  of  Shaf tesbury, 
the  chairman  of  the  committees,  and  general  factotum  of  the 
House.  Half  a  dozen  noble  lords,  who  appeared  to  be  overcome 
by  the  influence  of  the  'land  of  dropsy-head/  make  up  the 
whole  audience.  .  .  .  There  is  no  excitement  at  all  about  it; 
noble  lords  address  each  other  across  the  table  as  quietly  as 
in  a  private  conversation."  "The  Duke  of  Wellington  is  there 
in  his  blue  frock,  white  waistcoat  and  dandified  pantaloons. 
'Torpid'  is  scarcely  the  word;  he  seems  to  be  in  a  deep  slumber, 
his  chin  resting  upon  his  breast,  his  arms  crossed  and  his  legs 
crooked  together.  .  .  ."  Nevertheless  he  hears  everything  but 
when  he  chooses  to  reply  "cannot  speak  two  sentences  without 
a  painfully  long  pause  between  them."  Of  the  life  and  earnest- 
ness marking  the  House  of  Commons,  the  description  went  on, 
there  was  none  visible  in  the  House  of  Lords.  "What  have  the 
peers,  in  fact,  to  be  earnest  about?  They  have  nothing  to  fight 
for — nothing  to  gain — they  are  generally  old  men,  many  of  them 
'used  up.'  "  16 

The  old  refrain  of  American  Mammon-worship  was  taken  up 
by  Dickens.  He  omitted  any  acknowledgment  to  the  train  of 
predecessors  who,  for  nearly  half  a  century,  had  made  the  same 
accusation.  A  prominent  American  feature,  Dickens  chimed  in, 
was  the  love  of  "smart  dealing,"  which  veneered  many  a  swindle 
and  gross  breach  of  trust.  In  like  manner,  he  went  on,  all  kinds 
of  deficient  and  impolitic  American  usages  were  referred  to  the 
national  love  of  trade.  In  the  most  incidental  way  he  added: 
"Though  oddly  enough  it  would  be  a  weighty  charge  against 
a  foreigner  that  he  regarded  the  Americans  as  a  trading  peo- 
ple." With  this  slight,  casual  admission  he  resumed  his  attack. 
"The  love  of  trade  is  the  reason  why  the  literature  of  America 
is  to  remain  forever  unprotected."  Then  making  use  of  a  literary 
device,  he  purported  to  quote  the  consensus  of  what  Ameri- 
cans said  of  themselves:  "  'For  we  are  a  trading  people  and 
don't  care  for  poetry,  though  we  do,  by  the  way,  profess  to  be 
very  proud  of  our  poets;  while  healthful  amusements,  cheer- 


A  CONFLICT  OF  OPINIONS  161 

ful  means  of  recreation,  and  wholesome  fancies  must  fade 
before  the  stern  utilitarian  joys.'  "  17 

The  attempt  to  fathom  motives — to  go  behind  the  returns — 
is  a  pursuit  as  deceptive  as  it  is  profitless.  For  the  change  of 
view  which  Dickens  in  later  years  expressed  toward  America, 
various  explanations  have  been  made.  He  was  chastened  in 
spirit,  he  was  better  informed,  and  so  on.  Passing  over  these 
ascriptions  we  anchor  upon  one  solid  fact:  in  England  itself 
his  "American  Notes"  was  subjected  to  criticism.  But  this  did 
not  come  until  after  an  American  woman,  compelled  to  re- 
main in  London  by  the  delays  of  a  lawsuit  she  was  pressing, 
had  retaliated  to  Dickens'  criticisms  by  writing  a  book — 
"Change  for  the  American  Notes."  18  This  offered  some  im- 
provement over  the  usual  inadequate  tenor  of  American  re- 
plies to  British  critics. 

Those  replies,  whether  to  Dickens  or  Marryatt  or  other 
critics,  were  couched  in  the  form  of  a  general  denial.  "John 
Bull  is  led  to  believe  that  every  American  eats  his  dinner  in 
five  minutes;  that  the  good  citizens  of  New  York  walk  about 
with  bowie  knives;  that  every  American  is  an  unregenerate 
spitter,  and  otherwise  irretrievably  vulgar,  presumptuous  and 
overbearing.  Looking  at  the  surface  of  our  society,  these  Eng- 
lish critics  conclude  that  the  ways  and  institutions  of  their 
country  are  infinitely  better.  After  all,  let  English  authors  think 
and  write  what  they  will  about  us;  we  can  survive  slander  and 
go  on  our  way  as  an  independent  nation."  This  composite 
epitome  suffices  to  give  a  faithful  idea  of  the  replies  in  Ameri- 
can publications. 

In  London,  however,  "An  American  Lady"  went  a  step  fur- 
ther. If,  was  the  gist  of  her  book,  Mammon  was  the  god  of 
American  worship,  pounds  sterling  were  the  idol  of  the  English 
people.  She  could  claim,  and  not  unjustly,  that  she  was  in  a 
city  where  the  rustle  of  pound  notes  was  conspicuously  audible. 
Her  accusation  had  its  effect  upon  one  London  publication;  the 
editors  of  "The  Economist"  were  too  well  informed  on  financial 
affairs  to  dismiss  it  as  a  vagary.  "Nor  do  we  think,"  said  a 
comment  in  that  publication  on  her  charge,  "that  this  is  simply 
a  'You,  too.'  The  reverence  paid  to  wealth  in  this  country  is 
undoubtedly  great  but  [this  saving  qualification  had  to  be 


162  AMERICA  STRIKES  BACK 

slipped  in]  it  is  not  as  great  as  in  the  United  States.  In  that 
country,  money  is  almost  the  only  source  of  distinction,  and 
therefore  is  more  sought  after  than  here,  where  it  is  not  the  only 
one.  .  .  .  But  we  are  not  prepared  to  assert  that  this  eager 
desire  for  wealth  is  peculiar  either  to  England,  or  to  her  Ameri- 
can children  or  to  both  of  them  together."  19  An  unavoidable 
admission,  this  last  named,  seeing  that  all  along  in  the  columns 
of  the  same  periodical  was  regular  correspondence  from  various 
European  capitals  showing  clearly  enough  the  zealous  struggle 
for  wealth  there.  The  periodical  agreed  with  "An  American 
Lady's'7  opinion  of  English  travelers  in  America.  "Many,"  it 
said,  "who  pretend  to  give  a  fair  and  true  picture  of  men  and 
manners  in  America  do,  in  fact,  produce  caricatures  of  the 
coarsest  kind."  But  it  criticized  her  for  following  the  same 
course  in  England  in  drawing  erroneous  conclusions  from  in- 
sufficient data.  Her  charges  of  British  love  of  money,  boasting, 
unfeelingness  and  cruelty,  were  not,  it  further  said,  sustained 
by  specific  proof. 

This  was  a  valid  objection,  and  gave  a  most  useful  hint  of 
a  line  to  be  followed  in  such  later  American  replies  as  were 
made  to  European  criticism.  Generalizations  did  not  answer 
the  purpose,  and  were  all  the  more  without  reason  considering 
that  an  examination  of  current  British  records  would  have 
brought  out  the  fullest  amount  of  incriminating  data. 

Maryatt's  book  had  hardly  been  published  and  Dickens'  not 
yet  issued  when,  at  the  behest  and  for  the  benefit  of  the  East 
India  Company  the  British  Government  warred  with  China. 
Despite  the  Chinese  Government's  interdictory  decrees,  great 
quantities  of  opium  were  surreptitiously  poured  into  China;  in 
1836  alone  more  than  27,000  chests  of  opium  had  entered  the 
one  port  of  Canton.  In  and  out  of  the  British  Parliament  the 
ghastly  effects  of  the  opium  habit  were  recognized.  But  trade 
was  trade,  and  India  was  then,  all  in  all,  yielding  an  estimated 
£6,000,000  a  year  to  Britain. 

A  heated  debate  ensued  in  the  House  of  Commons,  in  1840, 
over  the  question  of  the  propriety  of  war.  Leading  the  opposi- 
tion forces,  Gladstone  declared  war  needless.  The  British  Gov- 
ernment, he  stated,  had  the  fullest  power,  if  it  cared  to  exercise 


A  CONFLICT  OF  OPINIONS  163 

it,  to  suppress  the  opium  trade.  It  could,  he  indicated,  stop 
vessels  laden  with  opium,  break  up  the  opium  depots  in  India, 
check  the  cultivation  of  opium  there,  and  put  a  stigma  upon 
the  traffic.  None  of  these  simple  and  effective  measures  had 
been  taken.  Another  member — Sidney  Herbert — allowed  his 
indignation  to  transcend  the  customary  bounds  of  discreet  Par- 
liamentary language.  He  denounced  the  war  with  China  as  a 
war  without  just  cause;  "we  are,"  he  set  forth,  "endeavoring 
to  maintain  a  trade  resting  upon  unsound  principles  to  justify 
proceedings  which  are  a  disgrace  to  the  British  flag."  20 

It  was  during  the  course  of  this  war  that  Lord  Palmerston, 
a  member  of  the  Cabinet,  took  occasion  to  tell  Parliament  of 
the  Government's  pre-eminent  service  in  advancing  British 
trade  interests.  With  a  politic  disclaimer  that  he  intended  to 
boast,  Palmerston  then  delivered  this  encomium  upon  the  Gov- 
ernment represented  by  himself:  "I  assert  it  as  my  opinion  that 
no  former  Government  ever  attempted  so  much  to  improve 
the  commerce  of  the  country,  or  ever  attempted  it  with  so  much 
success."  Sums  then  rolled  from  his  lordly  lips;  from  1830  to 
1839  British  exports  had  risen  from  £38,000,000  to  £53,000,- 
000,  and  in  the  same  period  imports  from  £46,000,000  to  £62,- 
000,000.  To  his  audience  these  figures  spoke  with  ingratiating 
eloquence. 

By  the  war  against  China  the  East  India  Company  profited 
well.  The  British  Government  had  arranged  to  recoup  the  com- 
pany for  its  expenses  in  preparing  armament  in  India  for  use 
in  the  war.  The  company's  bill  was  £573,442.  Under  the  terms 
of  the  peace  treaty  with  China  the  owners  of  opium  which  was 
confiscated  or  surrendered  in  China  were,  it  seems,  recognized 
claimants  for  compensation  amounting  to  more  than  £1,281,- 
OOO.21 

A  banquet  was  given,  on  December  20,  1844,  by  the  munici- 
pality of  Manchester  and  its  merchants  and  manufacturers, 
to  Sir  Henry  Pottinger  upon  his  return  from  treaty  negotia- 
tion with  China.  In  proposing  the  toast,  Mayor  Alexander  Kay 
of  Manchester  glowingly  said: 

"I  may  remind  you,  gentlemen,  that  the  Empire  of  China, 
which  has  been  extensively  opened  to  you  by  the  successful 
negotiations  of  Sir  Henry  Pottinger  .  .  .  comprises  a  popula- 


164  AMERICA  STRIKES  BACK 

tion  which  is  now  computed  to  amount  to  upwards  of  three 
hundred  and  forty  millions  of  souls ;  and  it  will  be  easy  for  you, 
gentlemen,  all  of  whom  are  accustomed  to  minute  calculations, 
at  once  to  determine  what  the  degree  of  advantage  will  be  to 
this  manufacturing  city  by  having  a  market  of  this  extraordi- 
nary extent  opened  out  to  us.  (Loud  cheers.)  You  will  recol- 
lect, gentlemen,  that  the  population  of  Great  Britain  amounts 
to  twenty-seven  million  of  people;  and  if  we  consider  for  a 
moment  that  twenty-seven  million  of  people  now  have  the 
opportunity  of  free  and  equal  trade  with  a  population  exceed- 
ing three  hundred  and  fifty  million  of  people,  the  advantages 
must  be  wholly  on  our  side.  (Loud  cheers.)  I  heard  an  exclama- 
tion which  proceeded  from  one  of  our  country  manufacturers 
on  the  subject,  which  I  daresay  will  convey  some  idea  to  the 
minds  of  the  gentlemen  present  of  the  advantages  which  we 
are  likely  to  derive  from  the  extension  of  our  intercourse  with 
China:  'Why/  said  the  worthy  manufacturer,  'all  the  mills  we 
have  now  will  hardly  make  enough  yarn  to  find  them  with  night 
caps  and  socks/  (Laughter.)"  22 

A  different  note  came  a  little  later  from  "The  People's 
Journal,"  of  London,  in  February,  1847.  Was  not  the  populace 
told,  it  growled,  that  British  wars  in  China  and  India  were 
righteous  and  defensive?  "But  as  in  the  present  wars  with  the 
Kaffirs,  for  what  has  this  system  of  war  been  so  far  perpetuated 
and  encouraged?  Simply  for  the  aggrandizement  of  the  aris- 
tocracy and  the  capitalists  connected  with  the  East  India  Com- 
pany." 

An  estimate  authoritatively  made  at  this  time  computed 
Britain's  average  annual  accumulation  of  capital  at  £60,000,- 
000,  possibly  £70,000,000.  The  greatest  share  came  from  the 
manufacturing,  mercantile  and  trading  elements.  In  less  than 
a  quarter  of  a  century  Britain's  shipping  had  increased,  despite 
ships  worn  out  or  lost  at  sea,  from  2,648,000  to  3,588,000  tons. 
Since  1820  British  cotton  factories  had  so  expanded  that  from 
150,000,000  pounds  of  cotton,  they  now  used  more  than  700,- 
000,000  pounds.  Where  British  woolen  factories  had  used 
7,691,000  pounds  of  foreign  sheep's  wool  in  1820,  they  now 
consumed  69,493,000  pounds  of  imported  wool,  independent  of 
the  increase  meanwhile  in  the  home  growth.  In  a  similar  way, 


A  CONFLICT  OF  OPINIONS  165 

silk,  linen  and  other  industries  had  all  extended  their  opera- 
tions.23 Britain's  yearly  exports  exceeded  America's  by  more 
than  $100,000,000. 

So  opulent  were  the  British  industrial  and  commercial  classes 
that,  joined  by  the  men  of  landed  estates,  they  were  able  to 
invest  enormous  sums  in  railways  in  Great  Britain  and  in 
America,  Canada  and  other  countries.  Up  to  1845  Parliament 
passed  four  hundred  and  twelve  acts  for  two  hundred  and 
seventy-eight  railways,  including  extensions,  in  Britain.  These 
acts  empowered  the  raising  of  a  total  of  more  than  £154,000,- 
000  as  either  capital  or  loans.24 

In  America  railway  promoters  frequently  had  to  resort  to 
bribery  for  the  passage  of  acts  giving  subsidies  in  grants  of 
public  lands  or  money.  The  procedure  in  Britain's  Parliament 
was  different.  No  money  corruption  was  there  evident;  mem- 
bers of  both  houses  of  that  body  themselves  composed  many  of 
the  leading  railway  promoters,  each  group,  in  reciprocal  support 
for  its  measures,  voting  for  acts  benefiting  other  groups.  In  fact, 
in  the  advertisements  of  railway  prospectuses,  the  names  of 
members  of  Parliament  were  prominently  featured  as  an  in- 
ducement for  public  investing  in  the  stock,  and  as  a  guarantee 
that  the  railway  interests  were  well  conserved  in  Parliament. 

Thus,  to  take  the  single  year  of  1845,  we  find  John  Benbow, 
M.P.,  chairman  of  one  railway  company,  and  other  members  of 
Parliament,  together  with  Lord  Forrester,  Viscount  Duncannon 
and  Lord  Alfred  Paget  on  its  managing  committee.  On  the 
committee  of  a  second  railway  company  were  Lord  Francis 
Egerton,  M.P.,  other  members  of  Parliament,  and  the  Earl  of 
Sefton,  and  Lord  Lilford.  The  provisional  directing  committee 
of  a  third  projected  railway  embraced  four  members  of  the 
House  of  Commons,  and  the  Earl  of  Denbeigh  and  Desmond 
and  Lord  Leigh.  Of  a  fourth  railway  company  the  chairman 
was  John  Lewis  Ricardo,  M.P.,  and  on  its  board  were  Viscount 
Leveson,  M.P.,  the  Earl  of  Macclesfield,  the  Earl  of  Shrews- 
bury and  the  Earl  of  Wilton.  On  the  managing  committee  of  a 
fifth  railway  company  were  Lord  Sussex  Lenox,  Viscount 
Curzon,  Lord  Dunboyne,  Lord  Edward  Chichester,  and  two 
members  of  the  House  of  Commons.  Such  examples  could  be 
multiplied;  the  list  of  promoters  of  British  railways  read  like 


166  AMERICA  STRIKES  BACK 

a  roll-call  of  Parliament  itself.25  Justifying  its  action  by  the 
plea  that  the  certainty  of  high  profits  was  necessary  to  stimulate 
railway  construction,  Parliament  sanctioned  the  charging  of 
rates  guaranteeing  the  high  returns  of  ten  per  cent  dividends. 
But,  as  the  sequel  showed,  the  average  dividend  on  common 
stock  was,  for  many  years,  less  than  three  per  cent.  Vast  sums 
went  into  the  pockets  of  landowners  in  the  buying  of  land,  into 
the  hands  of  lawyers  in  legal  arrangements,  and  into  the  coffers 
of  contractors.  Up  to  the  end  of  1850  the  construction  of  British 
railroads — often  "scamped"  work,  as  we  shall  see, — cost  £34,- 
243  a  mile,  a  clear  waste  of  £24,000  on  every  mile  the  con- 
struction of  which  later  was  done  for  £10,000. 

The  great  sums  put  into  railway  projects  came  largely  from 
manufacturers  and  traders  all  saturated  with  profits,  and  from 
estate  owners.  From  real  estate  in  England  the  annual  income 
had  expanded  from  more  than  £49,000,000  in  1815  to  more 
than  £80,000,000  in  1843,  a  sixty-two  per  cent  increase.26  In 
praising  British  capacity  to  pour  funds  into  railways,  without 
causing  a  dearth  of  money  in  other  quarters,  a  noted  British 
economist  reckoned  that  between  1846  and  1850,  the  sum  of 
£150,000,000  was  invested  in  railways  in  Britain.  This  amount, 
he  specified,  came  from  the  middle  (capitalist)  classes,  and  so 
glutted  were  they  with  money  that  this  large  investment  was 
made  "without  disorganizing  the  trade  of  the  country,  or  hinder- 
ing our  progress  in  other  directions."  27  He,  however,  gave  the 
figures  for  only  five  years;  the  total  amount  of  money  raised 
in  Britain  for  railroad  construction  from  the  inception  of  rail- 
ways to  the  end  of  1858  seems  to  have  been  more  than  £325,- 
000,000.  And  before  1854  Britain  invested  £550,000,000  in 
other  countries,  its  foreign  investments  thereafter  increasing  at 
the  rate  of  £30,000,000  annually.28 

The  London  authority  on  financial  and  industrial  interests 
gloated  over  the  rapid  building  of  railways,  and  visioned  in 
this  and  other  mechanical  innovations  the  regeneration  of  man- 
kind. "It  must,  we  think,"  declared  "The  Economist"  for  Au- 
gust 23,  1851,  "be  perfectly  clear  to  every  man  that  the  growth 
of  an  opulent  middle  class  lies  at  the  bottom  of  all  modern 
improvement  in  politics." 

While  one  class  was  reveling  in  opulency  and  vaunting  itself 


A  CONFLICT  OF  OPINIONS  167 

as  the  source  of  all  progress,  what  was  the  state  of  the  working 
population?  Three-fourths  of  this  in  London  lived  and  slept 
in  one  room;  in  nine  deaths  out  of  ten  among  the  poor,  the 
body  remained  in  that  single  room  for  five  or  six  days.  The 
Parliamentary  report  relating  the  prevalence  of  such  conditions 
made  a  comparison  with  some  American  States  with  their  strict 
sanitary  laws.29 

Partly  because  of  humanitarian  urgings,  and  in  part  because 
the  higher  classes  were  badly  scared  by  recurrent  epidemics, 
a  movement  for  public  baths  and  washhouses  was  begun,  in 
1844,  in  many  English  cities.  A  memorial  of  the  Governor  of 
the  Bank  of  England  and  others  lamented  the  high  mortality 
among  all  classes.  Of  London's  vast  population,  a  large  propor- 
tion, the  memorial  set  forth,  could  only  on  rare  occasions  find 
the  time  to  go  the  necessary  distance  to  obtain  a  bath.  When 
they  tried  to  get  one  they  were  confronted  with  impediments. 
Penalties  prohibited  bathing  in  the  Thames.  Only  at  particular 
seasons  and  at  certain  hours  were  the  Lee  and  Serpentine  rivers 
open  to  them.  By  its  costliness  the  comfort  of  a  warm  bath  was 
out  of  their  reach.  "In  the  one  close  room  in  which  the  family 
is  frequently  forced  to  live,  even  if  the  wife  is  lying  in,  or  there 
are  sick  and  dying  persons  in  it,  the  whole  of  its  washing  must 
be  done.  There  the  fire  must  be  made,  the  water  boiled,  and  the 
clothes  washed,  dried  and  ironed.  Disease  is  constantly  ag- 
gravated to  a  fearful  extent,  and  death  itself  frequently  oc- 
casioned." The  report  went  on  to  say  that  the  poor  could  not 
afford  to  buy  soap,  and  that  the  dirty  condition  in  which  they 
existed  was  demoralizing. 

At  a  public  meeting  in  London  for  the  formation  of  an  associa- 
tion to  supply  the  working  class  with  public  bathing  and  wash- 
ing accommodations,  the  Bishop  of  London  spoke:  ".  .  .  The 
crowds  who  line  the  streets  of  this  great  metropolis,  and  who 
are  surrounded  on  all  sides  by  the  evidence  of  its  wealth  and 
grandeur,  are  little  aware  of  the  fearful  masses  of  human  misery 
and  wretchedness  masked  by  the  splendor  of  those  streets.  They 
are  little  aware  that  perhaps  within  a  few  yards  of  the  shops 
filled  with  the  richest  productions  of  the  world,  and  of  those 
counting  houses  belonging  to  men  whose  fortunes  are  to  be 
reckoned  by  millions — that  in  this  very  'city  where  merchants 


168  AMERICA  STRIKES  BACK 

are  princes' — there  is  a  vast  amount  of  human  misery  masked 
by  the  splendid  front  presented  by  her  great  streets."  The 
Bishop  went  on  to  tell  how  only  medical  men  and  visiting  clergy 
came  in  contact  with  such  conditions.  The  poor  "lived  in  a 
compulsory  state  of  filthiness";  such  were  the  expense  and 
trouble  of  going  out  to  fetch  water  that  dirty  water  was  re- 
tained in  rooms.  Another  speaker  told  of  one  London  parish 
having  a  population  of  50,000  "many  of  whom  are  living  in 
hovels  not  fit  for  the  lower  animals,"  while  in  another  parish 
of  112,000  population  fully  92,000  were  destitute;  "many  of 
them  do  not  take  off  their  clothes  from  week  to  week."  30 

Criticism  aroused  in  continental  European  countries,  over 
disclosures  showing  English  contrasts  of  wealth  and  misery, 
led  to  a  British  reply  instancing  the  same  in  France.  In  that 
country,  it  was  con jectur ally  and  roughly  estimated,  there  were 
(in  terms  of  francs),  50.000  millionaires;  200,000  rich  men; 
550,000  in  easy  circumstances;  4,200,000  in  moderate  circum- 
stances; and  6,000,000  who  earned  a  decent  but  uncertain  ex- 
istence. Of  the  remainder  of  France's  36,000,000  population, 
16,000,000  were  subject  to  the  most  scanty  and  uncertain  ex- 
istence; 5,000,000  were  in  extreme  poverty;  and  4,000,000 
were  paupers,  thieves  and  prostitutes.31  Further  to  heighten 
Britain's  superior  position,  the  plight  of  a  great  number  of 
France's  small  farm  proprietors  was  brought  out.  Mortgages  in 
France  amounted  to  more  than  £300,000,000,  and  called  for  an 
average  payment  of  eight  per  cent.  This  exacted  a  yearly  sum  of 
about  £25,000,000  in  interest;  "nearly,"  commented  "the  Econ- 
omist," of  London,  "the  same  as  the  whole  interest  of  our  na- 
tional debt."  Much  of  France's  pauperism  was  attributed  to  the 
combined  operation  of  heavy  taxes  and  interest.  Official  French 
reporters  were  cited  as  showing  that  of  3,494,666  dwellings, 
348,401  did  not  have  a  window;  1,817,328  only  one  window; 
and  1,328,937  only  two  windows.  "In  these  huts,"  the  British 
editor  summarized,  "live  16,000,000  of  the  population,  or  nearly 
one-half  the  whole."  32 

The  British  farmer,  however,  was  loaded  with  his  own 
troubles,  financial  and  otherwise.  He  too  was  weighted  with 
heavy  taxes  and  interest  charges.  Antiquated  game  laws,  such 
as  the  Revolution  had  abolished  in  France,  still  were  in  force 


A  CONFLICT  OF  OPINIONS  169 

in  Britain.  Crops  there  were  often  destroyed  by  rabbits  and 
other  animals,  but  the  farmer  had  no  remedy.  All  farm  leases 
or  rental  terms  contained  clauses  for  the  preservation  of  game; 
in  the  case  of  tithes,  game  was  a  portion  of  the  produce  reserved 
to  the  church,  and  where  an  individual  landlord  was  the  owner, 
game  was  reserved  for  his  pleasure.  Moreover,  anyone  without 
a  license  who  killed  game  was  subject  to  heavy  fine  and  im- 
prisonment.33 The  British  farmer  looked  upon  the  poacher  as 
a  godsend. 

Midway  through  the  nineteenth  century,  however,  assaults 
upon  America  were  frequent  in  British  publications.  "The 
Edinburgh  Review"  was  still  spouting  calumny.  In  its  number 
for  January,  1845,  it  described  the  Presidents  of  the  United 
States  as  demagogues  by  nature  and  profession;  men  who 
"adopt  the  language,  stiffen  the  prejudices,  inflame  the  passions, 
and  obey  the  orders  of  the  people."  The  article  went  on:  "To 
the  influences  which  thus  corrupt  and  degrade  the  person  who 
is  both  her  chief  magistrate  and  her  prime  minister,  we  attribute 
much  of  the  deterioration  of  the  public,  and,  we  fear  we  must 
add,  the  private  character  of  America — the  bluster,  the  vanity, 
the  rapacity,  the  violence  and  the  fraud  which  render  her  a 
disgrace  to  democratic  institutions,  and  a  disgrace  to  the  Anglo- 
Saxon  race." 


CHAPTER   XIV 
POUNDS  STERLING  TRIUMPHANT 

IT  was  a  British  scientist  who  provided  Americans  with  an 
effective  reply  to  the  scoffs  of  his  own  countrymen.  Sir  Charles 
Lyell,  renowned  geologist,  visited  America  for  no  other  purpose 
than  to  study  its  geological  formations.  Free  from  any  ulterior 
motive  to  deride  America's  people,  he  was  able  to  see  condi- 
tions impartially.  One  thing  that  greatly  impressed  him  was  the 
American  standard  of  using  wealth.  In  America,  he  wrote,  there 
was  no  compulsory  law  as  in  France  for  the  equal  partition  of 
property  among  children,  nor  any  law  of  entail  and  primogeni- 
ture as  in  Britain.  "Not  only  is  it  common  for  rich  capitalists," 
he  noted  of  America,  "to  leave  by  will  a  portion  of  their  fortune 
towards  the  endowment  of  national  institutions,  but  individuals 
during  their  lifetime  make  magnificent  grants  of  money  for  the 
same  objects." 

Lyell  was  astonished  at  the  large  sale  of  literary  works  in 
America,  and  at  the  prevalence  of  popular  libraries,  especially 
in  Massachusetts.  Dealing  with  America  at  large  he  expressed 
this  opinion:  "In  no  subject  do  the  Americans  display  more 
earnestness  than  in  their  desire  to  improve  their  system  of 
education,  both  elementary  and  academical."  Another  Ameri- 
can trait  that  caused  him  to  comment  was:  "One  of  the  first 
peculiarities  that  must  strike  a  foreigner  in  the  United  States 
is  the  deference  paid  universally  to  the  sex,  without  regard  to 
station.  Women  may  travel  alone  here  in  stage-coaches,  steam- 
boats, railways,  with  less  risk  of  encountering  disagreeable  be- 
havior, and  of  hearing  coarse  and  unpleasant  conversation,  than 
in  any  country  I  have  ever  visited.  The  contrast  in  this  respect 
between  the  Americans  and  the  French  is  quite  remark- 
able. .  .  ."  i 

Following  LyelPs  lead,  "The  North  American  Review,"  in 
October,  1848,  made  a  cutting  reply  to  John  Stuart  Mill's 

170 


POUNDS  STERLING  TRIUMPHANT  171 

jibe  at  America  as  a  land  where  "the  life  of  one  sex  is  devoted 
to  dollar  hunting,  and  of  the  other  to  the  breeding  of  dollar 
hunters."  So  well  established  in  America  was  the  custom  of 
liberality,  declared  that  magazine,  "that  very  wealthy  people 
are  in  a  manner  constrained  to  make  large  bequests  for  public 
objects  in  their  wills;  and  if  one  occasionally  fails  to  comply 
with  the  general  expectation  in  this  respect,  his  memory  incurs 
such  obloquy  that  sometimes  his  heirs  have  been  shamed  into 
an  attempt  to  atone  for  his  neglect."  In  England,  "The  North 
American  Review"  further  pointed  out,  the  founder  of  a  for- 
tune wished  to  entail  it  to  his  family,  to  be  held  inalienably. 
"But  an  American  is  much  more  likely  to  covet  immediate 
applause  and  the  transmission  of  his  name  with  honor  to  pos- 
terity through  the  endowment  of  a  public  institution  or  the 
furtherance  of  some  scheme  of  public  utility.  .  .  .  We  do  not 
tolerate  gold  lace,  nor  cocked  hats,  nor  footmen  with  powdered 
heads  and  gold-headed  canes.  .  .  .  The  most  natural  and 
sensible  way  of  deriving  personal  gratification  from  newly- 
acquired  wealth  and  by  making  a  show  of  it  in  the  eyes  of  the 
world  is  to  give  largely  to  public  charities.  The  sums  which  are 
contributed  here  by  individuals  for  the  support  of  schools, 
colleges,  churches,  missions,  hospitals  and  institutions  of  sci- 
ence and  beneficence,  put  to  shame  the  official  liberality  of  the 
oldest  and  wealthiest  governments  in  Europe." 

Philanthropy  by  rich  Americans  was,  in  fact,  established  by 
a  long  line  of  donors.  Stephen  Girard  was  one  of  the  more 
conspicuous  examples.  When  this  Philadelphia  money-getter 
died,  in  1831,  his  fortune  of  $7,500,000  was  the  greatest  in 
America  at  that  time.  To  relatives  he  left  but  $140,000,  and 
to  friends  and  former  employes  $65,000.  The  remainder  was 
bequeathed  to  public  benefactions,  including  a  college  for  the 
education  of  white  orphans. 

Among  other  millionaires  who  were  then  giving  legacies  for 
public  benefit  was  John  McDonough.  Originally  from  Balti- 
more, he  had  acquired  his  fortune  from  real  estate  in  New 
Orleans  and  vicinity.  This  peculiar  personage  was  supposed  to 
be  engrossed  in  selfishness.  To  the  end  of  his  life  he  clung  to 
obsolete  fashions.  His  tall  figure  was  clad  in  an  old  blue  coat 
with  high  collar,  a  white  vest,  ruffled  shirt  and  voluminous 


172  AMERICA  STRIKES  BACK 

white  cravat;  his  hair  was  combed  back  and  gathered  in  a 
queue;  his  feet  were  encased  in  antiquated  round-toed  shoes. 
How  would  the  aged  eccentric  dispose  of  his  property?  Public 
curiosity  was  intense. 

His  will,  it  developed,  had  been  drawn  in  1838,  and  was  un- 
changed when  he  died  in  1850.  It  began  with  this  statement: 
"And  for  the  general  diffusing  of  knowledge  and  consequent 
well-being  of  mankind,  convinced  as  I  am  that  I  can  make  no 
disposition  of  those  worldly  goods  which  the  Most  High  has 
been  pleased  to  place  under  my  stewardship  that  will  be  so 
pleasing  to  Him  as  that  by  means  of  which  the  poor  will  be 
instructed  in  wisdom  and  led  into  the  path  of  virtue  and  holi- 
ness." And  of  this  "general  diffusing  of  knowledge"  his  will 
declared:  "One  thing  is  certain,  it  will  not  take  wings  and  fly 
away  as  silver  and  gold,  government  and  banknotes  often  do. 
It  is  the  only  thing  in  this  world  of  ours  which  approaches  to 
anything  like  permanency;  or  in  which  at  least  there  is  less 
mutation  than  in  things  of  man's  invention.  The  little  riches  of 
this  world,  therefore,  which  the  Most  High  has  placed  in  my 
hands,  and  over  which  he  has  been  pleased  to  place  and  make 
me  his  steward,  I  have  invested  therein  that  it  may  yield  an 
annual  revenue  to  the  purpose  I  have  destined  it  forever."  He 
bequeathed  a  slight  sum  to  Baltimore  relatives;  his  millions 
were  given  for  the  establishment  of  an  asylum  for  poor  children, 
an  orphan  asylum,  and  a  school  farm  for  destitute  children. 
He  further  explained  in  his  will  that  had  he  children,  "I  would 
bequeath,  after  a  virtuous  education  (to  effect  which  nothing 
would  be  spared),  a  very  small  amount  to  each,  merely  suffi- 
cient to  excite  them  to  habits  of  industry  and  frugality."  2 

Even  John  Jacob  Astor,  who  combined  the  extremes  of 
avariciousness  with  notorious  parsimony,  felt  obliged  to  leave 
at  least  $400,000  of  his  $20,000,000  fortune  for  the  establish- 
ment of  the  public  library  in  New  York  City. 

Ineffectual  attempts  again  were  made  in  Britain,  in  1843 
and  in  1847,  to  have  Parliament  pass  acts  for  general  education. 
The  House  of  Lords  could  not  on  these  occasions  be  charged 
with  sole  responsibility  for  opposition.  It  was  in  1847  that 
Macaulay,  in  the  House  of  Commons,  delivered  a  long  speech 


POUNDS  STERLING  TRIUMPHANT  173 

exposing  the  widespread  illiteracy  in  Britain.  Apart  from  other 
facts  that  he  gave,  he  cited  the  reports  of  inspectors  of  mar- 
riages. Of  nearly  130,000  couples  wedded  in  the  year  1844, 
more  than  40,000  of  the  bridegrooms,  and  more  than  60,000 
of  the  brides,  could  not  sign  their  names  but  made  their  marks. 
Macaulay  then  directed  attention  to  acts  of  the  Massachusetts 
settlers  "illustrious  forever  in  history,"  in  establishing  popular 
education,  and  to  William  Penn's  advocacy  of  such  education 
as  a  policy.  Macaulay  referred  to  Washington's  last  legacy  to 
the  American  Republic,  "Educate  the  people,"  and  to  the  same 
unceasing  exhortation  from  Jefferson.  Taking  up  the  antagonism 
in  Britain  to  popular  education,  Macaulay  concluded:  "A  fu- 
ture age  will  look  back  with  astonishment  to  the  opposition 
which  the  introduction  of  that  system  encountered,  and  will  be 
still  more  astonished  that  such  resistance  was  offered  in  the 
name  of  civil  and  religious  freedom."  3 

A  factor  that  now  intensified  feeling  against  America  among 
important  classes  in  Britain  was  American  mercantile  com- 
petition. Largely  as  a  means  of  warding  off  the  incoming  steam- 
ship competition,  the  clipper  was  created;  and  American  ship- 
yards excelled  in  the  building  of  this  type  of  ship.  The  prime 
quality  of  the  clipper  was  speed;  in  cargo  carrying  she  was  not 
as  fully  serviceable  as  other  classes  of  ships.  The  progenitor  of 
the  clipper  was  built  at  Baltimore  in  1832.  The  first  real  clipper 
— "The  Rainbow" — was  designed  in  1843  at  New  York  City. 
"The  Dreadnought,"  otherwise  called  "The  Flying  Dutchman," 
built  at  Newburyport,  Massachusetts,  was  one  of  the  largest 
and  fleetest  clippers;  and  on  one  occasion,  it  was  reported,  she 
made  the  run  from  Sandy  Hook  to  Queenstown  in  thirteen 
days,  nine  hours.  The  charge  for  cargoes  to  distant  ports  was 
then  in  a  measure  determined  by  the  speed  with  which  cargoes 
were  delivered.  The  earnings  of  a  single  voyage  would  often 
amount  to  more  than  the  original  cost  of  the  clipper  ship. 

With  the  repeal  of  British  navigation  laws,  British  merchants 
began  to  buy  or  charter  speedy  American  clippers  each  of 
which  could  make  five  voyages  while  a  British  ship  made  four 
of  equal  distances.  American  ship  tonnage  did  not  exceed  Brit- 


174  AMERICA  STRIKES  BACK 

ish.  And  Britain  had  built  many  iron  ships,  selling  some  to 
France  which  had  built  none.  Yet  in  Britain  America's  merchant 
marine  was  looked  upon  as  a  perilously  close  rival.  In  1850 
America's  total  merchant  marine,  including  steam  vessels,  was 
3,535,454  tons,  and  American  ships  carried  nearly  three-fourths 
of  America's  imports  and  exports.  In  the  same  year  Britain 
had  a  merchant  marine  totaling,  in  the  home  and  foreign  trade, 
3,565,133  net  tons,  of  which  168,474  net  tons  were  steam  ves- 
sels. The  shipping  of  the  entire  British  Empire  totalled  4,232,- 
692  tons. 

Referring  to  the  rapid  progress  of  America's  merchant  ma- 
rine, "The  Economist,"  of  London,  on  June  21,  1851,  took 
occasion  to  point  to  Britain's  superior  trade  as  proof  of  "how 
ill-founded  are  those  unworthy  jealousies  and  apprehensions 
which  are  so  often  expressed  in  relation  to  United  States  rivalry 
with  this  country."  American  government  returns  showed,  "The 
Economist"  stated,  exports  in  1850  of  $136,946,912,  or  about 
£27,000,000,  while  in  the  same  year  exports  of  British  produce 
and  manufacturers  from  Britain  amounted  to  £70,000,000.* 
Computing  the  value  of  British  imports  against  that  of  exports, 
there  was  an  apparent  balance  against  Britain  of  perhaps  £22,- 
000,000.  But  this,  "The  Economist"  stated,  was  overcome  or 
nearly  so  by  the  more  than  £10,000,000  of  exports  of  foreign 
and  colonial  produce  not  included  in  the  official  figures,  by  the 
profits  on  all  exported  goods,  by  profits  from  ship  freights,  and 
by  returns  from  enormous  investments  abroad.  With  Britain 
in  so  flourishing  a  condition,  "The  Economist"  advised,  symp- 
toms of  increasing  prosperity  in  the  United  States  "should  not 
be  viewed  with  that  narrow  jealousy  which  we  regret  to  observe 
has  become  too  much  the  fashion  among  a  class  of  antiquated, 
but  not  altogether  uninfluential  politicians  of  the  day." 

Some  accurate  idea  of  the  huge  amount  of  British  capital 
employed  in  various  parts  of  the  world  had  been  given  by  "The 
Economist"  in  a  previous  issue  (January  11,  1851).  It  stated 
that  British  India  annually  yielded  nearly  £4,000,000  in  divi- 
dend payments.  In  addition,  India  yearly  remitted  a  further 
large  sum,  estimated  at  about  £5,000,000,  for  interest  on  British 
capital  used  in  banking  establishments,  sugar  and  indigo  culti- 
vation, and  in  internal  commerce  in  India.  Furthermore,  there 


POUNDS  STERLING  TRIUMPHANT  175 

were  constant  remittances  of  money  to  Britain  from  British 
officials  in  India,  and  profits  which  British  merchants  in  India 
sent  home  for  investment. 

From  every  British  colony  revenues  from  investment  flowed 
into  Britain.  Most  of  the  banks  in  Australia,  Canada  and  the 
West  Indies,  "The  Economist"  enumerated,  were  conducted 
with  British  capital,  the  dividends  from  which  were  sent  to 
Britain.  To  the  same  point  were  sent  the  profits  from  British 
colonial  land-cultivation  enterprises,  a  considerable  part  of 
which  were  operated  on  British  capital.  Still  further,  "The 
Economist"  went  on,  British  investors  had  a  large  investment 
in  foreign  railways  and  canals,  and  owned  great  blocks  of 
American,  French,  Dutch,  Russian,  Spanish,  Mexican,  South 
American  and  other  foreign  bonds,  payments  upon  which  like- 
wise streamed  into  Britain. 

In  selecting  a  British  company  as  an  example  of  the  dimen- 
sions of  profits  reaped,  we  need  only  turn  to  the  testimony  re- 
garding the  Hudson  Bay  Company.  Its  general  profits  at  this 
period  averaged  12  per  cent  upon  its  capital;  the  total  profits 
acquired  during  its  existence  from  the  fur  trade  alone  were 
estimated  at  £20,000,000.  Supplementing  this  amount  were 
great  profits  from  its  vast  land  holdings,  parts  of  which  it  kept 
selling  to  settlers  at  high  prices.  Also,  it  drew  continuous  profits 
from  other  lines  of  business.  On  the  list  of  Hudson  Bay  Com- 
pany stockholders,  in  or  about  1856,  were  the  Earl  of  Selkirk, 
Countess  Lydia  Cavan,  Baron  Wynford,  Viscount  Folkestone, 
Sir  George  Sinclair,  Sir  Edmund  Antrobus,  Bishop  John  Banks 
Jenkinson,  the  Rev.  Oswald  Littleton,  and  scores  of  other 
notables  in  the  aristocracy  and  the  church,  in  politics  and  busi- 


This,  in  America,  was  a  period  in  which  bribing  was  lavishly 
done  by  railway  promoters  to  obtain  from  Congress  or  some 
legislatures  great  areas  of  public  domain — and  frequently  Gov- 
ernment, State  or  municipal  financial  aid  as  well.6  The  process 
of  corruption  was  different  and  highly  surreptitious  in  France 
and  Britain.  In  France  railway  promoters,  by  methods  of 
which  there  is  no  formal  record,  were  able  to  requisition  the 
Government  itself  into  acting  as  agent  for  extracting  from  the 


176  AMERICA  STRIKES  BACK 

public  and  collecting  much  of  the  capital  needed.  Until  this 
arrangement  was  made,  French  financiers  declined  to  advance 
any  capital  for  railway  construction.  Only  after  securing  ex- 
traordinary privileges  olid  French  railway  promoters  consent  to 
begin  railway  construction  in  France,  almost  a  decade  after 
Belgium  had  built  its  State-owned  railway  lines.  The  French 
people  were  taxed  to  supply  four-tenths  of  the  required  capital, 
the  stockholders  contributing  the  remainder.  Nine  great  lines 
(seven  radiating  from  Paris,  the  other  two  provincial)  were 
built,  after  stipulation  by  the  Government  that  each  should 
have  a  monopoly  in  its  district  and  a  guarantee  of  high  profits. 
Under  the  regime  of  Napoleon  III,  the  complaisance  of  which 
cloaked  the  worst  forms  of  gilded  corruption,  the  duration  of 
railway  franchises  was  extended  to  ninety-nine  years,  interest 
on  railway  bonds  was  guaranteed,  and  the  lines  were  consoli- 
dated under  a  government  regulation  which  allowed  stock- 
holders great  dividends.  Except  in  the  case  of  one  company 
paying  10  per  cent,  dividends  from  French  railways  were  15 
and  16  per  cent — very  high  returns  compared  to  those  in  either 
America  or  Britain. 

The  lords  and  other  members  of  Parliament  so  considerably 
comprising  the  boards  of  directors  of  British  railways  had  the 
necessary  influence  and  finesse  to  obviate  official  disclosures 
and  hush  private  contention.  But  one  scandal  implicating  the 
management  of  the  Eastern  County  Railway  broke  through 
the  bounds  of  secrecy  by  being  taken  into  the  courts.  The  case 
involved  two  groups  of  contending  stockholders,  each  side 
charging  the  other  with  fraud.  The  episode  induced  "The  Econo- 
mist," of  London  (on  February  2,  1856),  to  draw  a  parallel  in 
which  it  did  some  plain  talking.  It  editorialized:  "The  English 
and  Americans  resemble  each  other  very  closely  in  their  eager- 
ness to  grasp  wealth.  We  know  there  has  been  great  jobbery 
and  great  fraud  in  connection  with  the  American  [railway] 
lines,  as  there  have  been  in  connection  with  the  English 
lines.  ...  In  the  [United]  States,  however,  the  check  of  public 
opinion  over  unusual  rapacity  is  more  prompt  and  more  power- 
ful in  its  operations  than  here,  and  we  may  expect  that  jobbery, 
corruption  and  fraud  are  on  the  whole  less  there  than  here, 
where  the  check  of  public  opinion  is  more  mixed  with  and 


POUNDS  STERLING  TRIUMPHANT  177 

weakened  by  a  reliance  upon  the  action  of  Government."  This 
last  reference  was  an  obscure  and  complacent  assumption  that 
for  the  rectification  of  abuses  the  British  public  depended  upon 
the  action  of  the  Government,  including  Parliament.  But,  as 
we  have  seen,  Parliament  was  reluctant  to  open  up  scandals  in 
which  its  own  members  were  often  implicated. 

The  editorial  then  fully  acknowledged  the  profit-making 
capacity  of  French  railway  promoters,  but  made  a  distinction 
in  the  case  of  the  French  people  at  large  "simply  because  here 
[in  Britain]  the  whole  community  is  more  exclusively  bent  on 
acquiring  wealth  than  there  [in  France] ." 

In  England,  then,  and  in  some  other  European  countries, 
American  railway  jobbery  was  given  loud  publicity.  Damna- 
tion of  American  corruption  was  blared  in  many  an  article  and 
editorial.  But  that  moralizing  was  never  tempered  by  any  ad- 
mission that  European  financiers  and  investors  hastened  to 
seek  their  benefits  from  the  proceeds  of  that  corruption.  Not 
with  the  means  but  with  the  results  were  European  men  of 
capital  concerned;  bribe-giving  assured  great  grants  of  public 
domain  and  subsidies  of  public  funds,  thus  making  railways  a 
luciously  attractive  investment. 

But  while  the  evil  deeds  of  American  railway  promoters 
were  widely  heralded  abroad,  hardly  any  mention  was  published 
of  the  operations  of  railway  promoters  in  Canada.  To  Eu- 
ropeans, and,  in  fact,  to  the  population  of  contiguous  America 
itself,  affairs  in  Canada  were  effectively  screened  from  atten- 
tion. Unlike  America,  Canada  was  not  a  cynosure,  and  no 
group  or  country  was  interested  in  making  it  an  object  of  at- 
tack. Little  news  of  Canadian  happenings  filtered  into  America, 
and,  except  of  course  through  investment  accounts  in  English 
financial  journals,  still  less  into  Europe. 

Consequently,  Canada  eluded  scrutiny,  and  so  escaped  the 
reputation  of  a  venality  and  jobbery  which,  in  one  signal  re- 
spect, outstripped  anything  America  could  show.  Nothing  like 
the  rapacity  of  Canadian  legislators  and  executive  officials  was 
known  in  America.  In  dispensing  charters,  railway  and  other, 
the  Canadian  Parliament  followed  the  British  model.  There 
was  hardly  a  member  of  the  Parliament  of  the  Province  of 
Canada  (then  composed  of  Ontario  and  Quebec),  or  of  other 


178  AMERICA  STRIKES  BACK 

legislative  or  executive  bodies,  who  was  not  boldly  pushing 
projects  in  which  he  was  a  paramount  beneficiary.  The  men 
having  the  power  to  enact  laws  did  not,  as  often  was  the  case 
in  America,  make  them  to  give  booty  to  outsiders.  Canadian 
legislators  made  and  used  the  powers  of  their  law  for  their 
own  individual  enrichment. 

From  this  point,  the  Canadian  system  differed  from  the 
British,  and  ran  parallel  to  that  in  America.  Like  the  United 
States,  Canada  had  its  vast  areas  of  vacant  public  lands  ready 
for  spoliation.  As  a  country  with  immense  unsettled  sections, 
and  with  such  parts  as  were  settled  sparsely  inhabited,  Canada 
afforded  railway  promoters  the  opportunity  of  making  the  same 
plea  so  generally  effective  in  America.  This  was  the  argument 
that  construction  of  railways  could  not  be  undertaken  without 
public  aid.  Of  this  assistance,  the  granting  of  public  lands  was 
one  kind  and  of  public  funds  another.  But  in  Canada  solicitude 
for  railway  owners  was  extended  to  the  point  of  Government 
guarantee  of  railway  bonds. 

A  history  of  Canadian  railways  might  fill  a  volume;  an  in- 
formative sketch  will  here  suffice.  At  the  outset  of  railways 
in  Canada,  eminent  politicians  hurried  to  pre-empt  the  charters. 
One  of  the  most  industrious  of  those  politicians  was  Allan  N. 
MacNab,  long  a  notable  member,  then  Speaker  of  the  Canadian 
Parliament,  and  later  Prime  Minister  of  Canada.  He  made  the 
cynical  declaration,  famous  in  the  Canada  of  his  time,  that  "rail- 
roads are  my  politics."  Amassing  wealth,  he  was  created  a 
knight,  then  a  baronet,  and  his  daughters  married  British  titles. 

Associated  with  MacNab  as  railway  promoters  was  a  large 
contingent  of  prominent  fellow-members  of  Parliament  or  high 
office  holders.  As  a  member  of  Parliament,  MacNab  held  the 
pivotal  position,  for  a  considerable  time,  of  chairman  of  the 
Standing  Committee  on  Railways.  On  this  committee  were  Sir 
Francis  Hincks  and  other  men  who,  at  the  same  time,  were 
engaged  in  promoting  their  own  railway  projects.  Many  other 
members  of  Parliament — some  of  whom  became  Cabinet  and 
Prime  Ministers — busily  co-ordinated  their  functions  as  legis- 
lators with  their  activities  as  railway  promoters. 

Lord  Sydenham,  Governor-General  of  Canada,  was  highly 
vexed  at  the  uncouth  conduct  and  too  open  rapacity  of  the  men 


POUNDS  STERLING  TRIUMPHANT  179 

in  the  Canadian  Parliament.  He  was  accustomed  to  the  show  of 
gentlemanly  detachment  with  which  the  British  Parliament 
consummated  the  most  flagrant  jobbery;  long  experience  had 
made  the  executing  of  such  transactions  a  fine  art.  "You  can 
form  no  idea,"  wrote  Sydenham  in  a  private  letter,  in  1840,  to 
Lord  John  Russell,  British  Secretary  for  War  and  the  Colonies, 
aof  the  manner  in  which  a  Colonial  Parliament  transacts  its 
business.  I  got  them  into  comparative  order  and  decency  by 
having  measures  brought  forward  by  the  Government,  and  well 
and  steadily  worked  through.  But  when  they  came  to  their  own 
affairs,  and,  above  all,  to  the  money  matters,  there  was  a  scene 
of  confusion  and  riot,  of  which  no  one  in  England  can  have 
any  idea.  Every  man  proposes  a  vote  for  his  own  job;  and  bills 
are  introduced  without  notice,  and  carried  through  all  their 
stages  in  a  quarter  of  an  hour!  .  .  ."  7 

Frequent  and  continuous  was  the  jobbery  in  Parliament  for 
the  benefit  of  members.  A  group  of  these,  headed  by  MacNab, 
were  the  incorporators  of  the  London  &  Gore  Railway  Com- 
pany. Foremost  among  the  incorporators  of  the  St.  Lawrence 
&  Atlantic  Railway  Company  were  A.  T.  Gait,  for  many  years 
an  influential  member  of  Parliament,  and  Peter  McGill  of  the 
Legislative  Council  of  Canada,  for  years  president  of  the  Bank 
of  Montreal.8  The  array  of  incorporators  of  the  Canada,  New 
Brunswick  &  Nova  Scotia  Railway  Company  was  largely  a 
roster  of  legislators,  with  MacNab  at  the  front  of  the  list.9 
Hincks  and  other  politicians  obtained  the  charter  for  the  Wood- 
stock &  Lake  Erie  Railway  Company  which  later  developed 
into  the  Great  Southern  Railway  Company,  the  line  of  which 
traversed  Southern  Ontario.10  The  ubiquitous  MacNab  was 
one  of  the  incorporators  of  the  London  &  Port  Sarnia  Railway 
Company;  almost  immediately  after  the  charter  for  this  was 
granted,  lease  was  transferred  to  the  Great  Western  Railway 
Company  of  which  MacNab  was  the  head.11  A  crowd  of  mem- 
bers of  Parliament  comprised  the  incorporators  of  the  Grand 
Trunk  Railway  Company.12  Likewise  of  the  Strathroy  &  Port 
Frank  Railway  Company,  and  of  three  other  railway  corpora- 
tions chartered  in  1857.13 

Well  fortified,  also,  with  the  needed  influence  was  the  North 
Shore  Railway  Company  (later  the  Quebec,  Montreal,  Ottawa 


180  AMERICA  STRIKES  BACK 

&  Occidental  Railway  Company).  Sir  George  Simpson  of  the 
Hudson  Bay  Company  was  an  early  president,  and  various 
members  of  Parliament  were  directors.  The  chief  promoter  of 
this  railway  was  J.  Cauchon,  a  prominent  Quebec  politician; 
he  was  Crown  Commissioner  of  Lands  and  a  member  of  the 
Canadian  Government  Ministry  in  1857,  and  later  became  the 
company's  president.14  As  in  the  case  of  various  other  railways, 
the  influence  worked  with  perfect  precision  in  securing  boun- 
teous gifts;  a  total  of  2,700,000  acres  of  land  was  granted  to 
the  North  Shore  Railway  Company  by  the  Quebec  Legislature. 
The  company  also  received  $752,000  in  cash  bonuses,  and 
$1,948,600  in  loans  from  the  Provincial  Government  and  from 
various  municipalities. 

The  incorporators  of  the  European  &  North  American  Rail- 
way Company  embraced  almost  the  whole  personnel  of  the 
Government  of  the  Province  of  New  Brunswick.15  Part  of  this 
railway  later  became  the  Government-owned  Intercolonial  Rail- 
way, and  another  portion  was  merged,  in  1872,  into  the  St.  John 
&  Maine  Railway  Company,  which  received  from  the  New 
Brunswick  Government  and  from  certain  municipalities  $1,240,- 
000  cash  subsidies — a  sum  equaling  nearly  one-half  of  the  rail- 
way's cost. 

These  instances  are  merely  indicative  of  the  prodigal  busi- 
ness done  in  Canada  by  legislators  bestowing  charters  upon 
themselves.  But  railway  charters  were  only  one  phase  of  Parlia- 
ment's industry.  At  the  same  time  coteries  of  members  presented 
themselves  and  associates  with  a  miscellany  of  charters  for  the 
establishment  of  banks  and  of  insurance,  gas  lighting,  water, 
canal  and  other  companies.  MacNab,  Hincks,  Malcolm  Cam- 
eron and  various  other  notables  in  Parliament  or  occupying 
high  office  were  incorporators.16 

At  a  later  period,  members  of  the  Canadian  Parliament 
adopted  evasive  tactics,  hiding  their  connection  with  corpora- 
tions by  substituting  names  of  relatives,  friends  or  go-betweens. 
But  at  this  particular  stage  subterfuge  was  deemed  wholly 
unnecessary.  Aside  from  the  brazenness  with  which  members 
voted  charters  and  other  vested  rights  to  themselves,  they 
boldly  used  their  names  and  positions  in  prospectuses  which 
often  were  decoys  for  stock-jobbing  purposes. 


POUNDS  STERLING  TRIUMPHANT  181 

Within  a  few  years  after  the  initiating  of  some  of  the  rail- 
way projects,  the  promoters  succeeded  in  transferring  to  their 
corporate  selves  an  aggregate  of  nearly  $22,000,000  from 
Canada's  central  Government  treasury,  and  $10,000,000  from 
the  poorly-populated  counties  and  municipalities.  The  process 
of  draining  public  treasuries  was  continued  until,  in  the  course 
of  decades,  the  cash  subventions  for  privately-owned  railways 
reached  more  than  $244,000,000,  and  Government  guarantee 
of  railway  bonds  covered  more  than  $245,000,000.  These  were 
not  the  only  features  of  Government  aid.  Many  of  the  railway 
charters  specifically  authorized  the  free  appropriation  of  tim- 
ber, stone  and  other  construction  material  from  the  public 
domain.  Municipalities  were  influenced  to  make  extensive  gifts 
of  land  for  railway  approaches,  terminals  and  stations.  And 
land  grants  to  railways  were  extended,  ultimately  rising  to  a 
total  of  more  than  56,000,000  acres. 

With  members  of  Parliament  acting  as  both  legislators  and 
as  principals  in  corporations,  there  was  obviously  no  need  of 
money  corruption.  But  as  to  railway  construction  contracts 
and  the  influencing  of  officials,  charges  of  corruption  were  fre- 
quent. One  ugly  scandal  broke  forth  in  1854.  In  his  capacity  of 
Inspector-General  or  Finance  Minister  of  Canada,  Hincks  was 
sent  to  England  to  negotiate  with  the  British  Minister  con- 
cerning the  building  of  the  Grand  Trunk  Railway. 

The  English  contracting  firm  of  Peto,  Brassey,  Betts  & 
Jackson  had  amassed  wealth  by  railroad  construction  in  Eng- 
land and  France.  (If  any  curious  investigator  seeks  to  learn 
the  methods  by  which  railways  in  England  were  built,  he  need 
only  consult  Samuel  Smiles'  "Life  of  George  Stephenson,"  writ- 
ten not  long  after  the  inception  of  railways.  Stephenson  was  the 
perfector  of  the  locomotive.  That  book  supplies  informative 
details  of  how  those  railways  were  "scamped"  by  improper 
ballasting  and  other  inefficient  construction.)  The  banking 
house  of  Rothschild  owned  an  eighth  interest  in  the  Grand 
Trunk  Railway's  capital  stock;  and  the  Grand  Trunk  Railway 
construction  contract  was  awarded  to  Peto,  Brassey,  Betts  & 
Jackson,  who  agreed  to  take  two-thirds  of  their  pay  in  the  rail- 
way's stocks  and  bonds. 

According  to  Thomas  C.  Keefer,  perhaps  the  most  eminent 


182  AMERICA  STRIKES  BACK 

Canadian  civil  engineer  of  his  time,  the  general  assumption  was 
that  this  firm  had  obtained  the  contract  by  exercising  its  own 
powerful  influence,  without  need  of  any  intermediary.  Subse- 
quently, however,  disclosures  showed  that  Hincks'  name  had 
been  inscribed  in  the  contractors'  books  as  the  proposed  re- 
cipient of  a  "douceur"  (a  present  or  an  intended  bribe).  The 
gratuity  was  £50,400  of  paid-up  Grand  Trunk  Railway  stock. 
Hincks  made  a  public  announcement  repudiating  the  transac- 
tion.17 Unfortunately  for  Hincks,  the  books  did  show  that  the 
amount  was  credited  to  him.  The  Speaker  of  the  Canadian 
Legislative  Council  or  Parliament  at  the  time  was  John  Ross, 
head  of  the  Grand  Trunk  Railway  Company.  The  scandal 
could  not  be  suppressed,  and  the  leaders  of  Parliament  re- 
luctantly consented  to  the  appointment  of  an  investigating 
committee. 

A  principal  witness,  George  Brown,  a  member  of  Parliament, 
definitely  charged:  That  Hincks  had  made  a  bargain  with  the 
English  contractors  by  which  they  were  to  get  exorbitant  sums 
in  stocks,  bonds  and  money,  and  that  they  obtained,  by  means 
of  Hincks'  influence  in  the  Canadian  Parliament,  contracts 
for  building  two  other  railways,  and  authority  to  amalgamate 
these  and  other  lines.  For  these  services,  Brown  further  testified, 
the  English  contractors,  it  was  believed,  had  placed  in  Hincks' 
name  the  £50,400  of  stock,  and  that  of  this  amount  £10,080 
had  been  paid  on  account  to  Hincks'  credit  when  public  dis- 
closures of  the  affair  caused  stoppage  of  further  installment 
payments. 

Rejecting  the  plea  that  admission  of  circumstantial  evidence 
was  customary,  the  majority  of  the  investigating  committee 
voted  against  accepting  Brown's  testimony,  upon  the  ground 
that  only  matters  within  his  personal  knowledge  would  be  con- 
sidered. Publication  of  his  testimony  in  the  records  was  allowed, 
however.  Hincks'  own  explanation  was  that  the  stock  credited 
to  him  was  merely  "held  in  trust  for  allotment  in  Canada  to 
parties  who  might  be  desirous  to  take  an  interest  in  the  com- 
pany." This  explanation  was  generally  ridiculed,  but  it  was 
given  full  credence  by  the  committee,  which  even  went  further 
in  its  accommodating  exoneration.  The-  stock,  it  reported,  had 
been  put  in  Hincks'  name  "without  his  knowledge,"  and  he  was 


POUNDS  STERLING  TRIUMPHANT  183 

cleared  from  having  any  personal  interest  in  it.  With  the  off- 
hand remark  that  everyone  else  who  could  do  so  was  doing 
likewise,  that  report  was  frankly  cynical  in  excusing  stock 
speculations  by  Cabinet  Ministers.18 

In  addition  to  Ross  and  Hincks,  the  directorate  of  the  Grand 
Trunk  Railway  Company  comprised  E.  P.  Tache,  James  Mor- 
ris, Malcolm  Cameron,  Peter  McGill,  George  E.  Cartier  and 
other  Parliamentary  notables.  "At  this  identical  time,"  wrote 
Keefer,  "the  contractors  wielding  a  gigantic  scheme  which 
traversed  every  county  in  the  Province,  virtually  controlled  the 
Government  and  the  Legislature  while  the  expenditure  con- 
tinued." 19  With  equal  accuracy  he  might  have  added  that  they 
controlled  the  policy  of  certain  influential  newspapers.  After 
having  been  manipulated  wildly  upward,  the  market  price  of 
Grand  Trunk  Railway  stocks  and  bonds  began  to  decline.  Not- 
withstanding the  50  per  cent  discount  at  which  its  stock  was 
selling,  the  St.  Lawrence  &  Atlantic  Railway,  controlled  by 
Sir  A.  T.  Gait  and  others,  was  "unloaded"  upon  the  Grand 
Trunk  Railway  Company.  After  it  had  paid  an  exorbitant 
price  upon  the  representation  that  the  purchased  railway  was 
complete,  the  Grand  Trunk  Railway  Company  had  to  spend 
$1,000,000  to  put  the  line  between  Montreal  and  Portland  in 
some  fair  degree  of  condition.20  Finance  Minister  Hincks  now 
had  to  meet  the  charge  that  he  had  obtained  secret  advance 
information  of  this  amalgamation,  and  had  speculated  in  the 
stock.  That  he  did  get  a  telegram  from  Gait  and  did  buy  stock 
was  admitted,  as  likewise  the  fact  that  after  the  amalgamation 
the  market  value  of  the  stock  rose.  But  the  generous  Legislative 
Council  Committee  reporting  on  this  charge  palliated  the  trans- 
action, on  the  ground  that  Hincks  did  not  buy  the  stock  until 
several  weeks  after  the  amalgamation.21 

As  the  value  of  Grand  Trunk  Railway  stocks  and  bonds  kept 
on  depreciating,  the  agents  or  sub-contractors  of  Peto,  Brassey, 
Betts  &  Jackson  resorted  more  and  more  to  "scamping"  con- 
struction work.  For,  in  addition  to  their  two-thirds  payment 
in  securities,  they  were  paid  by  the  mile  for  work  performed. 
On  the  section  east  of  Toronto,  where  the  work  was  carried  on 
by  the  English  contractors,  the  rails  were  of  such  poor  quality, 
and  the  placing  of  sleepers  so  badly  done,  as  to  lead  later 


184  AMERICA  STRIKES  BACK 

"to  a  destruction  of  property  .  .  .  which  is  unprecedented 
in  the  history  of  railways.7'  22  The  entire  scheme  of  construc- 
tion was  manifestly  inefficient.  In  level  country  the  roadbed 
was  not  raised  to  keep  out  snow  and  water.  The  gradients  in 
hilly  regions  were  poorly  arranged  and  flagrantly  defective. 
Everywhere  "the  contractors  kept  the  road  as  near  the  surface 
as  the  contract  permitted,  no  matter  how  much  it  might  be 
smothered  in  winter  and  flooded  in  spring,  or  how  frequent  and 
severe  the  gradients  became."  Irrespective  of  railroad  consider- 
ations, stations  were  placed  where  land  was  cheapest;  this  was 
done  to  obtain  political  support,  or  to  benefit  from  a  specula- 
tion in  building  lots.23 

High  members  of  the  Canadian  Government  saw  no  im- 
propriety in  making  fortunes  by  having  contracts  themselves 
for  railroad  construction.  The  firm  of  Gzowski  &  Company, 
which  constructed  the  western  part  of  the  Grand  Trunk  Rail- 
way, from  Toronto  to  Sarnia,  comprised  such  members  of  Par- 
liament as  A.  T.  Gait,  L.  H.  Holton  and  D.  L.  Macpherson. 
Gzowski  later  was  knighted;  Holton  subsequently  became  a 
Cabinet  Minister  in  various  administrations,  and  was  twice 
Minister  of  Finance. 

The  agreement  of  the  British  contractors  to  take  the  bulk  of 
their  payment  in  Grand  Trunk  Railway  stocks  and  bonds  led 
presently  to  the  ruin  of  all  the  partners  except  Brassey,  who 
shrewdly  edged  out  of  the  mess.  He  left  a  fortune  estimated  at 
£7,000,000.  This  was  largely  inherited  by  his  son,  who  became 
a  British  Cabinet  Minister  and,  in  1886,  was  created  a  lord. 

The  Grand  Trunk  Railway  jobbery,  of  which  only  parts 
have  been  here  set  forth,  was  typical  of  many  railroad  scandals 
in  Canada.  The  promoters  of  the  Great  Western  Railway  were 
later  accused  of  having  at  this  time  illegally  appropriated 
$4,000,000  of  its  capital  for  the  building  of  an  American  line — 
the  Detroit  &  Milwaukee  Railway — and  for  other  unauthorized 
purposes.24  The  Northern  Railway  Company  was  enmeshed  in 
a  heinous  scandal  that  uncovered  its  methods  in  obtaining 
municipal  subsidies.25  Another  malodorous  scandal  unearthed 
corrupt  transactions  of  the  Great  Southern  Railway  Company 
directors  in  awarding  construction  contracts  and  in  procuring 
subsidies  from  cities  and  towns.26  Still  another  sensational 


POUNDS  STERLING  TRIUMPHANT  185 

scandal  concerned  the  illegal  loaning  of  public  funds  to  the 
Coburg  &  Peterboro  Railway  Company.27  These  scandals  were 
but  outer oppings  of  a  mass  of  other  dealings  common  enough 
yet  never  exposed  by  any  public  investigation. 

Only  a  glimpse  of  the  enormities  in  Canada  has  been  here 
presented.  And  they  continued,  although  with  somewhat 
changed  visage.  "Corruption  taints  the  majority  of  railway 
enterprises  from  their  inception  to  completion,"  wrote  David 
Mills  in  1872;  he  was  a  member  of  the  Dominion  Parliament, 
and  later  Minister  of  the  Interior.  "Charters  are  sought,  not 
infrequently  for  purposes  of  speculation.  Sometimes,  they  are 
used  to  blackmail  existing  lines.  However  much  a  railroad  is 
needed,  a  charter  is  seldom  obtained  without  difficulty,  and 
stock  is  bestowed  for  Parliamentary  support."  28  But  railway 
jobbery  up  to  the  time  at  which  Mills  wrote  was  only  a  pre- 
liminary to  the  ensuing  great  jobbery,  as  exemplified  in  the 
case  of  the  Canadian  Pacific  Railway  and  other  lines  in  develop- 
ing the  western  regions  of  Canada.  Yet  intermittently  down 
to  recent  times  Canadian  editorial  writers  and  Canadian  speak- 
ers made  a  practice  of  harping  upon  "Yankee  corruption." 

The  only  professed  European  critic  of  America  at  this  period 
who  evinced  anything  like  discrimination  was  Adam  G.  de 
Gurowski.  But,  in  his  book,  even  he  felt  that  he  had  to  com- 
ply with  the  existent  convention.  "Undoubtedly,"  he  wrote, 
"money-making  has  eaten  itself  deep  into  the  American  char- 
acter." He  then  provided  a  qualification  and  an  acknowledg- 
ment: "Neither  is  the  love  of  money  less  violent,  less  intense, 
among  the  majority  of  Europeans  than  among  Americans." 
Elsewhere  in  his  volume,  however,  by  declaring  that  great 
numbers  of  Europeans  emigrated  to  America  expressly  to 
make  money,29  he  insinuated — perhaps  unintentionally  by  his 
mode  of  expression — that  America  stood  out  as  nothing  but  a 
money-making  country.  If,  Gurowsky  wrote,  European  aris- 
tocracies did  not  make  money  in  the  same  commercial  way  as 
Americans,  they  acquired  it  by  oppressing  millions  in  extortion 
of  taxes  and  other  dues.  This  was  too  sweeping  a  generaliza- 
tion, as  we  have  amply  shown. 

It  need  hardly  be  said  that  while  some  immigrants  came  with 


186  AMERICA  STRIKES  BACK 

the  expansive  idea  of  making  fortunes,  the  motive  of  the  greater 
number  was  the  simple  one  of  improving  their  economic  wel- 
fare. A  living  wage  in  America,  the  opportunity  of  obtaining 
farming  lands  in  the  West  and  Northwest,  the  aim  to  escape 
from  military  conscription — these  were  impelling  reasons 
enough  for  emigration  from  Europe  to  America. 


PART  FOUR 
AN  UNABATED  CAMPAIGN 


CHAPTER   XV 
A  CHANGE  OF  TACTICS 

THE  mischief  done  to  a  country  by  antagonistic  criticism  is  not 
alarmingly  evident  in  times  of  peace.  A  people  may  be  irritated 
or  indignant  at  abuse,  or  they  may  look  upon  it  as  accustomed 
treatment  carrying  no  threat  of  danger  to  themselves.  But 
when  a  nation  thus  assailed  is  embroiled  in  war,  the  cumula- 
tive power  of  prolonged  misrepresentation  becomes  formidably 
manifest. 

Such  was  the  situation  with  which  the  North  found  itself  con- 
fronted during  the  Civil  War  in  America.  Before  that  event 
European  critics  descending  upon  America  made  no  regional 
distinctions  in  their  condemnation  of  the  mercenary  character 
of  all  Americans.  Inhabitants  of  North  and  South  were  alike  de- 
picted as  wholly  absorbed  in  money-making — the  North  from 
its  varied  industries,  its  shipping  and  finance,  the  South  from  its 
cotton,  and  both  sections  from  land  speculation.  The  Civil  War 
caused  a  sudden  critical  shift  and  an  abrupt  differentiation. 
Favoring  the  South  and  viewing  the  conflict  as  one  which  was 
disrupting  democratic  America,  European  aristocracies  concen- 
trated calumny  upon  the  North. 

One  of  the  British  writers  who  quickly  recognized  this  new 
mode  and  hastened  to  pander  to  it  was  Anthony  Trollope,  a  son 
of  Frances  Milton  Trollope.  Family  impecuniosity  in  his  youth 
had  inflicted  upon  him  privations  the  memory  of  which  had  im- 
planted a  keen  desire  for  money.  Trollope  made  of  writing  a 
methodical  business.  Rising  punctually  at  5.30  A.  M.,  he  steadily 
poured  forth  words  at  the  rate  of  250  every  quarter  of  an  hour. 
Each  book  he  regarded  as  the  output  of  a  prescribed  number  of 
days'  work,  and,  with  a  factory-like  supervision  over  himself, 
he  carefully  measured  the  quantity  as  he  proceeded.  He  had 
seen  the  family  rescued  from  penury  by  the  returns  from  his 
mother's  book  caricaturing  Americans,  and  he  judged  the  time 

189 


190  AMERICA  STRIKES  BACK 

now  propitious  for  him  to  repeat  the  performance.  The  expense 
of  a  trip  to  America,  he  reckoned,  would  well  repay  him,  and  it 
did;  his  book,  opportunely  entitled  "North  America,"  and  deal- 
ing with  the  Northern  States  only,  was  published  in  London  in 
1862  and  republished  in  America  in  the  same  year. 

Trollope  followed  his  mother  and  nearly  all  previous  critics 
in  his  lines  of  attack.  "New  York,"  he  wrote,  appears  to  me 
infinitely  more  American  than  Boston,  Chicago  or  Washington. 
.  .  .  Free  institutions  and  the  ascendency  of  dollars  are  the 
words  written  on  every  paving  stone  along  Fifth  Avenue,  down 
Broadway  and  up  Wall  Street.  Every  man  can  vote,  and  values 
the  privilege.  Every  man  worships  the  dollar,  and  is  down 
before  his  shrine  from  morning  to  night."  *•  Trollope  had  es- 
tablished his  major  premise  with  fine  abandon.  If  there  was  any 
fact  particularly  notorious  it  was  the  un-American  character  of 
New  York  City  with  its  hordes  of  immigrants;  from  1847  to 
1861  a  total  of  2,671,745  immigrants,  largely  Irish  and  Ger- 
mans, had  landed  at  New  York,2  and  a  large  proportion  had 
remained  in  that  city.  To  such  a  marked  extent  was  New  York 
of  foreign  composition  that  the  number  of  alien  naturalized 
voters  almost  equaled  the  native,  and  the  power  of  the  foreign 
vote  was  so  great  that  Tammany  Hall  politicians  made  a  system 
of  catering  to  it.  With  reckless  certitude,  however,  Trollope 
went  on: 

"It  is  generally  conceded  that  the  inhabitants  of  New  Eng- 
land, the  Yankees  properly  so-called,  have  the  American  char- 
acteristics of  physiognomy  in  the  fullest  degree.  The  lantern 
jaws,  the  thin  and  lithe  body,  the  dry  face  on  which  there  has 
been  no  tint  of  the  rose  since  the  baby's  clothes  were  first  aban- 
doned, the  harsh,  thick  hair,  the  intelligent  eyes,  the  sharp  voice 
and  the  nasal  twang  ...  all  these  traits  are  supposed  to  be- 
long to  the  Yankee.  .  .  .  But  at  present,  they  are,  I  think,  more 
universally  common  in  New  York  than  in  any  other  part  of  the 
States.  ...  No  man  has  a  type  of  face  more  clearly  national 
as  [sic]  the  American.  ...  I  think  it  comes  from  the  hot-air 
pipes  and  from  dollar  worship."  By  "hot-air  pipes,"  he  ex- 
plained, he  meant  "hot-air  chamber  heated  houses."  3  Faceti- 
ous as  this  observation  seems,  Trollope  made  it  seriously.  He 
had  been  in  a  mansion  or  two  heated  by  hot-air  furnaces,  and 


A  CHANGE  OF  TACTICS  191 

forthwith  rushed  to  the  conclusion  that  all  American  houses 
must  be  so  equipped. 

Coursing  hastily  through  the  Middle  West,  Trollope  re- 
marked: "No  men  love  money  with  more  eager  love  than  these 
western  men,  but  they  bear  the  loss  of  it  as  an  Indian  bears  his 
torture  at  the  stake."  4  "Mushroom"  fortunes  were  a  feature 
of  the  times,  it  is  true.  Often  made  rapidly,  their  sudden  loss  was 
usually  tempered  by  the  ardent  hope  of  regaining  riches.  Be- 
cause of  war  conditions  in  America  and  famine  in  Europe,  bene- 
ficiaries in  the  North  and  West  at  this  period  were  reaping 
wealth.  Profits  of  railroads,  and  of  woolen,  cotton,  munition  and 
other  factories  were  enormous.  In  the  three  years  1860-1862 
the  harvests  of  Great  Britain  were  a  failure,  and  in  one  of  those 
years  the  harvests  of  all  Europe  failed.  From  an  export  to  for- 
eign countries  of  20,000,000  bushels  of  wheat  annually  for  the 
ten  preceding  years,  America's  export  of  wheat  in  1862  reached 
60,000,000  bushels.5  Oil  wells  had  been  struck  in  Pennsyl- 
vania, and  there  followed  wild,  pervading  speculation  in  petro- 
leum stocks;  a  speculative  "get-rich-quick"  mania  in  stocks  of 
gold  mines  became  a  craze  in  East  and  West  alike. 

This  was  one  aspect  of  American  activity  at  that  time.  It  was 
perhaps  the  one  aspect  visible  to  a  novelist  who,  like  Trollope, 
preferred  to  view  the  whole  of  the  Union,  during  the  Civil  War 
years,  as  the  scene  of  an  ill-natured  social  comedy. 

Trollope  pictured  the  men  of  the  West  as  beginning  to  drink 
early  in  the  morning  and  taking  their  liquor  "in  a  solemn,  sullen, 
ugly  manner,  always  standing  at  a  bar."  Of  the  Western  women: 
"They  are  as  sharp  as  nails,  but  they  are  also  as  hard.  They 
know,  doubtless,  all  that  they  ought  to  know,  but  then  they 
know  so  much  more  than  they  ought  to  know.  They  are  tyrants 
to  their  parents,  and  never  practice  the  virtue  of  obedience  till 
they  have  half -grown-up  daughters  of  their  own."  He  bemoaned 
the  fate  of  Englishmen  in  America.  "Men  and  women  will  some- 
times be  impudent  to  him;  the  better  his  coat  the  greater  the 
impudence.  The  corns  of  his  Old  World  conservatism  will  be 
trampled  on  hourly  by  the  purposely  vicious  herd  of  uncouth 
democracy."  Trollope  raged  at  "the  continued  appliance  of  the 
irritating  ointment  of  American  braggadocio." 

However,  he  did  have  sense  enough  to  see  that  he  had  to  vary 


192  AMERICA  STRIKES  BACK 

his  long  plaint  by  yielding  some  slight  concession,  which  he 
made  thus:  "For  myself  I  do  not  like  the  Americans  of  the 
lower  orders.  I  am  not  comfortable  among  them.  They  tread  on 
my  corns  and  offend  me.  They  make  my  daily  life  unpleasant. 
But  I  do  respect  them.  I  acknowledge  their  intelligence  and 
personal  dignity.  ...  I  see  they  are  living  as  human  beings 
in  possession  of  their  faculties;  and  I  perceive  that  they  owe  this 
to  the  progress  that  education  has  made  among  them."  6  He 
predicted  that  if  the  negro  slaves  were  set  free  it  would  "make 
such  a  hell  upon  earth  as  has  never  yet  come  from  the  uncon- 
trolled passions  and  unsatisfied  wants  of  men." 

Every  representation  in  Trollope's  book  was  eagerly  accepted 
by  European  reviewers;  not  one  questioned  his  assertions,  many 
of  which  were  obvious  absurdities  or  sheer  distortions.  In 
France  a  defence  of  the  North  was  published  in  a  book  written 
by  Count  Agenor  de  Gasparin.  He  told  of  the  prevalence  of 
erroneous  ideas  throughout  Europe  about  the  North,  and  urged 
the  need  of  distinguishing  between  "a  few  corrupt  cities  in 
which  immigrants  from  our  Europe  flow  unceasingly  and  that 
which  is  met  in  the  whole  country."  He  reminded  Europe  of  its 
attitude  toward  the  North:  "Where  we  have  unceasingly  (even 
yesterday  again)  predicted  excesses,  acts  of  violence,  disasters, 
lack  of  discipline,  impotence,  anarchy  and  bankruptcy,  it  has 
known  how  to  place  order,  firmness,  the  organization  of  armies, 
the  creation  of  a  fleet,  confidence  in  the  public  funds."  7 

Trollope's  book  was  abundantly  used  by  the  powerful  aristo- 
cratic party  in  Britain  in  its  aim  to  turn  the  whole  of  British 
opinion  against  the  North  and  thus  to  bring  about  recognition 
of  the  Confederacy.  In  an  article  purporting  to  be  a  review  of 
Trollope's  book,  "The  Quarterly  Review,"  in  October,  1862, 
affirmed  that  undoubtedly  democratic  institutions  had  failed; 
they  had  been  unsuccessful  in  repressing  rebellion  and  in  up- 
holding liberty.  America,  the  article  prated  on,  was  "governed 
by  the  irresponsible  ruler  of  a  mob's  choice"  and  the  South  had 
produced  the  stronger  leaders;  "the  aristocracy  that  was  de- 
cried as  enervated  and  demoralized,  has  borne  the  powerful  and 
braggart  democracy  to  the  ground."  For  nearly  fifty  years  "The 
Edinburgh  Review"  had  thundered  against  enslavement  of 
negroes  as  a  mockery  of  America's  boasted  equality.  Now  that 


A  CHANGE  OF  TACTICS  193 

periodical  uttered  its  grave  doubts  whether  slavery  would  be 
suppressed  by  what  it  termed  the  conquest  of  the  South.  If  the 
slaves  were  freed,  it  argued,  would  not  Northern  capitalists 
take  them  over  and  work  them  under  compulsion?  Many  Eng- 
lishmen, "The  Edinburgh  Review"  further  stated,  felt  un- 
doubted satisfaction  at  the  breaking  up  of  the  great  democratic 
government  in  America,  but  "if  the  restoration  of  the  Union  is 
possible,  it  can  take  place  only  under  Jefferson  Davis,  not  un- 
der Lincoln." 

Trollope  had  incidentally  mentioned  in  his  book  that  £60,- 
000,000  of  British  capital  was  invested  in  American  railways 
and  other  enterprises.  Under  the  circumstances  this  admission 
was  regarded  as  of  minor  importance,  and  was  obscured  by  the 
mass  of  his  furious  invective  against  American  money-making 
proclivities.  But  at  about  the  same  time  other  British  authors, 
engaged  in  glorifying  their  country,  were  bringing  Britain's 
foreign  investments  to  the  foreground  to  demonstrate  how  that 
nation  far  outclassed  any  other  country  or  combination  of 
countries  in  its  possession  of  money.  Meagerly  concerned  with 
any  British  intellectual  or  scientific  achievements  were  many  of 
the  exaltations  of  England  at  this  period.  Britain's  command  of 
stupendous  financial  resources  was  the  fact  most  conspicuously 
blazoned;  and  Britishers  were  infused  with  the  assurance  that, 
whatever  the  flag  of  a  country,  British  capital  had  penetrated 
there,  yielding  torrents  of  profits. 

The  laudations  of  Charles  Knight,  an  English  publisher  noted 
in  his  era,  were  but  one  example.  In  a  series  of  volumes  de- 
scriptive of  London  he  devoted  a  chapter  to  the  mighty  re- 
sources and  far-reaching  ramifications  of  the  London  banks. 
Raptly  and  reverentially  did  he  write:  "The  power  here  al- 
luded to  of  great  accumulated  wealth  is  one  of  the  most  remark- 
able characteristics  of  England.  .  .  .  There  is  not  any  circum- 
stance which  so  much  distinguishes  a  young  country  like  the 
United  States,  wonderful  as  may  be  its  latent  resources  for 
future  opulence,  as  the  absence  of  masses  of  capital,  ready  at 
any  moment  to  be  moved  hither  and  thither,  wherever  a  profit 
is  to  be  realized.  The  railroads,  canals,  roads  and  most  of  the 
great  improvements  of  the  [United]  States  could  not  have  been 


194  AMERICA  STRIKES  BACK 

completed  without  English  capital.  There  is,  indeed,  scarcely  an 
important  enterprise  in  any  quarter  of  the  globe  which  is  not 
in  some  degree  sustained  by  the  'money  power'  of  England." 
He  then  gave  figures  showing  the  magnitude  of  the  daily  money 
operations  of  the  London  banks  with  their  mountains  of  gold.8 

An  article  in  "Blackwood's  Edinburgh  Magazine,"  in  1864, 
gorgeously  styling  London  "The  City  of  Gold,"  set  forth:  "As 
a  nation  we  have  grown  very  rich.  It  is  computed  that  the  an- 
nual savings  of  the  nation  amount  to  the  enormous  sum  of 
£80,000,000.  Like  thrifty  men,  we  desire  to  employ  that  sum, 
our  spare  money,  in  the  most  profitable  manner.  Now-a-days, 
too,  we  have  the  whole  world  open  to  us  as  a  field  of  commercial 
enterprise."  The  "savings"  here  referred  to  were  not  savings 
in  the  American  sense,  but  comprised  surplus  profits;  and  the 
amount  stated  was  an  underestimate.  According  to  the  foremost 
British  financial  authority,  annual  surplus  profits  exceeded 
£100,000,000.9  The  bankers  and  big  capitalists,  complained  the 
"Blackwood's"  article,  took  advantage  of  every  monetary  crisis 
by  charging  the  usurious  rate  of  nine  or  ten  per  cent  for  money, 
sweeping  into  their  own  coffers  the  profits  of  trade.  "Parliament 
inflicts  misery  upon  the  country  out  of  an  antiquated  deference 
to  some  bits  of  yellow  dross  [the  gold  supply  in  the  banks] .  Is 
this  wisdom,  is  this  humanity,  is  it  civilization?  It  is  barbarism 
and  folly,  preached  up  by  the  moneyed  interest,  the  high  priests 
of  Mammon,  at  the  expense  of  the  community." 

So  great  were  swiftly  accumulating  profits  that  the  sums 
which  British  capitalists  and  financiers  had  at  their  disposal 
for  investment  were  augmented  yearly  at  an  astounding  ratio. 
By  the  end  of  1865  the  amount  invested  in  British  railways 
alone  totaled  more  than  £455,000,000,10  a  great  part  of  which 
came  from  moneyed  men  and  concerns.  And  such,  too,  was  the 
further  acceleration  of  British  capital  that  in  1860  British  in- 
vestments abroad  mounted  to  what  was  then  esteemed  the  huge 
height  of  about  £750,000,000,  an  increase  of  £200,000,000  since 
before  1854.11  Many  a  native  publication  and  speaker  proudly 
pointed  to  this  fact  as  incontrovertible  proof  of  British  super- 
eminent  acumen  and  of  Britain's  invincible  financial  power. 

Within  two  years  after  the  outbreak  of  the  Civil  War,  the 
American  merchant  marine  had  shrunk  to  one-half  its  former 


A  CHANGE  OF  TACTICS  195 

tonnage,  and  the  decline  continued.  Simultaneously,  English 
publications  exultingly  contrasted  Britain's  superior  trade  fleet 
with  the  poor  or  lesser  fleets  of  other  countries.  "The  Spectator" 
of  London,  on  October  25,  1862,  contained  a  typical  eulogy  of 
British  mercantile  leadership.  France,  that  periodical  pointed 
out,  had  spent  great  sums  in  the  ambitious  endeavor  to  encour- 
age its  commerce;  it  had  subsidized  steamship  lines  to  various 
parts  of  the  world,  yet  it  had  not  been  able  to  stem  the  deteriora- 
tion of  its  commercial  fleet.  Germany's  exertions  had  produced 
better  results  in  creating  a  merchant  marine,  but  Britain's  fleet 
surpassed  that  of  all  countries.12  Further,  while  the  Civil  War 
was  disrupting  America's  foreign  trade,  the  British  Board  of 
Trade  was  glorying  in  the  fast-increasing  volume  of  its  country's 
exports,  which  rose  from  more  than  £146,000,000  in  1863  to 
nearly  £166,000,000  in  1865. 

Now,  too,  the  greed  and  inhumanity  of  British  railway  owners 
were  displayed  in  a  way  peculiar  to  a  thickly-settled  country. 
Disclosures  in  Parliament  brought  out  the  methods  pursued, 
and  showed  anew  the  revolting  conditions  in  which  the  poor 
of  London  existed. 

Railway  companies  in  London  had  utilized  the  legal  power 
conferred  upon  them  by  taking  over  land  in  crowded  districts 
for  approaches  and  terminals,  and  peremptorily  turning  out  the 
inhabitants  of  entire  neighborhoods.  The  Earl  of  Shaftesbury, 
in  1853,  had  tried,  but  in  vain,  to  get  an  act  passed  compelling 
every  railway  company  to  provide  lodging  accommodation  for  a 
number  of  people  equal  to  those  displaced.  In  Parliament  again, 
in  1861,  he  scored  the  rapacity  of  the  companies:  "While  they 
seek  to  make  a  profit  from  a  proceeding  which  spreads  devasta- 
tion through  the  whole  neighborhood,  it  is  not  right  that  gain 
should  be  all  on  one  side  and  all  loss  on  the  other."  Generally, 
he  stated,  the  people  ordered  out  of  their  abodes  were  poor 
working  people  who  had  not  time  to  look  about  for  new  lodgings, 
or  could  not  find  a  place  elsewhere,  and  were  in  a  state  of  con- 
sternation. 

"The  consequence  is,"  he  went  on,  "these  hundreds  or  thou- 
sands rush  in  vast  crowds  into  already  overcrowded  dwellings  of 
the  neighborhood.  .  »  .  I  will  give  your  Lordships  the  result  of 
an  examination  that  was  instituted  only  last  week.  A  great 


196  AMERICA  STRIKES  BACK 

demolition  of  houses  took  place  a  few  years  since  in  the  neigh- 
borhood of  Field  Lane,  City.  A  thousand  homes  were  pulled 
down,  four  thousand  families,  comprising  twelve  thousand  in- 
dividuals, were  turned  out  and  driven  into  surrounding  tene- 
ments. The  result  of  an  inquiry  made  a  few  days  ago  is  as 
follows:  I  took  forty-five  courts,  within  a  compass  of  a  few 
minutes'  walk;  twenty  of  these  courts  contained  in  the  aggregate 
two  hundred  and  fifty  houses,  in  which  were  one  thousand  and 
thirty- three  families,  each  occupying  one  room.  .  .  .  The  total 
number  of  inhabitants  in  these  rooms  is  five  thousand,  six  hun- 
dred and  sixty-five.  .  .  .  These  rooms  were,  in  all  instances, 
low,  dark,  dismal  and' dirty;  and  it  was  with  difficulty  that  I 
could  stand  upright  in  them.  Some  were  so  narrow  that,  by 
stretching  out  my  arms,  I  could  touch  both  walls  at  the  same 
time." 

Shaftesbury's  expose  was,  as  we  see,  duly  reported  in  the 
proceedings;  but  of  the  noble  lords  present  none,  except  the 
Earl  of  Derby  and  perhaps  a  few  others,  gave  it  any  serious 
attention.  Yet  Shaftesbury  continued: 

"I  would  not  for  the  world  mention  all  the  details  of  what  I 
have  heard,  or  even  of  what  I  have  seen,  in  these  scenes  of 
wretchedness.  But  there  are  to  be  found  adults  of  both  sexes 
living  and  sleeping  in  the  same  room,  every  social  and  domestic 
necessity  being  performed  there;  grown-up  sons  sleeping  with 
their  mothers,  brothers  and  sisters  sleeping  very  often,  not  only 
in  the  same  apartment,  but  in  the  same  bed.  My  Lords,  I  am 
stating  that  which  I  know  to  be  the  truth,  when  I  state  that 
incestuous  crime  is  frightfully  common  in  various  parts  of  this 
Metropolis — common  to  the  greatest  extent  in  the  range  of  these 
courts.  Can  anybody  doubt  that  anything  can  be  more  preju- 
dicial to  the  human  system  than  the  filthy  squalor,  the  fetid  air, 
and  depressing  influences  of  these  dwellings?  When  you  ask 
why  so  many  workingmen  betake  themselves  to  the  alehouse 
and  the  gin  palace  the  answer  lies  in  the  detestable  state  of 
their  homes." 

As  a  climax  Shaftesbury  gave  this  information: 

"Poor  children  having  no  other  ground  accessible  to  them, 
trundle  their  hoops  and  play  at  'cat'  in  the  thoroughfares  .  .  . 
and  I  learn  that  no  fewer  than  fifteen  young  boys  were  sent  to 


A  CHANGE  OF  TACTICS  197 

Coldbath  Fields  Prison  for  no  other  offence  than  indulging  in 
these  amusements."  13 

The  Earl  of  Derby  told  how  he  was  informed  by  a  resident 
of  one  parish  or  district  that,  "The  aristocracy  of  my  parish  con- 
sists of  families  who  are  able  to  indulge  in  the  luxury  of  two 
rooms."  Derby  cited  from  a  report  made  by  a  London  Sanitary 
Committee  physician,  who  described  how  husband,  wife  and 
often  four  or  five  children  existed  in  one  room.  "Adults  of  both 
sexes — sometimes  of  the  same,  sometimes  of  different  families 
— lodge  in  the  same  room,  men  and  women  herding  together 
like  savages,  and  where  the  slightest  regard  to  the  ordinary 
rules  of  common  decency  is  impossible."  14 

While  Trollope  and  others  were  inveighing  against  American 
susceptibility  to  speculative  manias,  in  England  a  multitude, 
seduced  by  hopes  of  quick  gain,  had  been  lured  by  the  stock 
schemes  of  several  British  promoters.  And  France,  periodically 
responsive  to  the  operations  of  plausible  financial  buccaneers, 
had  produced  another  of  the  type  in  the  person  of  M.  Mires. 

The  son  of  a  poor  Marseilles  watch-maker,  Mires  somehow 
obtained  money  to  begin  his  climb.  He  bought  a  leading  railway 
journal,  then  other  periodicals,  flowered  into  a  promoter  of  rail- 
way, and  coal-mining  enterprises,  and  established  a  company 
which  was  partly  a  bank  and  partly  a  stockbroking  concern.  By 
skilful  propaganda  he  coaxed  from  the  recesses  of  many  a 
French  household  a  stream  of  savings  from  which  he  purloined 
sums  for  payment  of  dividends.  The  diffusion  of  this  bait  in- 
fluenced an  increasing  swarm  of  investors,  excited  by  the  pros- 
pects, to  intrust  their  money  to  his  magical  handling.  For  years 
Mires  was  looked  up  to  as  a  marvelous  financier;  on  his  part 
he  was  meanwhile  successful  in  cloaking  his  wild-cat  and 
pyramiding  methods  and  his  thievery. 

But  the  day  inevitably  came  when  his  great  fraudulent  edi- 
fice collapsed.  The  crash  entailed  the  loss  of  a  vast  aggregate 
sum  by  many  sections  of  the  French  people,  as  infuriated  now 
as  they  were  trusting  before.  The  Mires  scandal  was  a  sensa- 
tional event  in  1861.  He  and  a  chief  accomplice  were  convicted 
of  embezzlement,  swindling  and  distributing  false  dividends, 
and  were  sentenced  to  tolerably  long  terms  in  prison.  The  Brit- 


198  AMERICA  STRIKES  BACK 

ish  press  found  itself  in  the  embarrassing  position  of  not  being 
able  to  moralize  on  French  public  credulity  and  French  finan- 
cial scoundrelism.  Mires,  it  was  acknowledged,  had  but  taken 
British  promoters  as  his  model  and  adapted  their  methods  to 
native  conditions.15 

In  the  aim  to  dazzle  the  public,  England's  commercial  classes, 
with  their  overloaded  stock  corporations,  made  a  policy  of 
annexing  titled  aristocrats.  To  gratify  and  entice  a  title-loving 
people,  schooled  in  the  tradition  that  peers  were  men  of  honor, 
companies  induced  titled  men  to  serve  as  directors  or  even  as 
executives.  Both  in  pursuit  of  trade  and  in  the  race  to  attach 
to  themselves  the  eclat  of  lofty  names,  companies  sharply  com- 
peted. There  was  no  lack  of  admonition  to  the  public  that  these 
personages  were,  in  a  business  sense,  complete  ignoramuses. 
"Only  too  often  they  [the  companies]  bestow  head  positions  on 
mere  aristocratic  or  high-sounding  names — on  men  who  can 
supply  no  one  desideratum  of  a  large  business  undertaking — 
men  who  have  never  had  personal  experience  of  a  single  func- 
tion essential  to  business."  16  Later  came  sharper  warnings, 
cautioning  the  public  to  view  with  "infinite  discredit  any  con- 
cern which  boasts  titled  names,  merely  as  such,  among  the 
directors."  17 

Opportunities  to  speculators  to  promote  any  flimsy  enterprise 
and  wheedle  the  public  were  not  less  easy  in  Britain  than  in 
America.  Contrary  to  erroneous  ideas  held  in  America  of  strict 
British  regulation,  English  laws  afforded  wide  license.  Any 
crowd  of  promoters  could  form  a  company  at  a  minute's  notice 
and  issue  a  roseate  prospectus  doctored  with  statements  based 
upon  falsehoods.  The  period  was  rated  by  British  promoters 
ripe  enough  for  another  projection  of  stock- jobbing.  In  every 
conceivable  line  of  finance,  industry,  utility  and  trade,  hundreds 
of  new  companies  were  forthwith  organized.  Some  were  bona- 
fide;  many  in  reality  were  mere  "bubble"  concerns.  The  stock 
issued  mounted  to  enormous  proportions,  and  the  capital  sub- 
scribed by  throngs  scrambling  to  make  money  rose  to  large 
sums.  In  the  year  1863  alone  263  companies — banking,  man- 
ufacturing, railway,  steam,  gas,  shipping,  mining  and  others — 
were  formed,  and  there  was  subscribed  £78,000,000,  of  which  a 
considerable  part  was  paid  in.  The  results  of  the  speculative  ex- 


A  CHANGE  OF  TACTICS  199 

cesses  of  1847  and  even  those  of  1857  had  become  dulled  in  the 
public  mind. 

When  apprehension  was  expressed  as  to  whether  the  strain  of 
the  huge  capitalization  required  would  not  ruin  the  country, 
monetary  experts  came  forward  with  a  soothing  assurance. 
Essentially,  British  investors  were  informed,  there  was  nothing 
to  cause  alarm;  so  much  money  were  Britain's  commercial 
classes  making  that  "we  have  capital  for  a  vast  number  more 
[of  companies]  if  they  will  prove  profitable."18  If,  indeed! 
Within  two  years  many  of  the  companies  had  exploded  with 
detonations  of  fraud;  England  had  again  proved  itself  "a  para- 
dise for  dishonest  speculators,"  with  consequent  "great  swin- 
dling of  the  public."  19 

Up  to  the  Civil  War  period,  America  had  but  a  sprinkling  of 
millionaire,  and  not  many  multimillionaire,  fortunes.  England, 
however,  had  produced  a  notable  showing  of  both,  each  year 
witnessing  fresh  accessions.  The  factor  conducing  to  bring  them 
strongly  to  general  attention  was  not  the  fortunes  themselves. 
It  was  the  sight  of  possessors  openly  and  boldly  using  their 
wealth  to  bribe  their  way  into  Parliament.  In  America  the  mil- 
lionaire cared  nothing  for  personal  incumbency  in  political  of- 
fice. Wealth  conferred  upon  him  all  of  the  distinction  he  wanted; 
and  whatever  legislation  was  necessary  to  his  projects  of  expan- 
sion he  could  often  accomplish  by  purchase.  But  the  ambitious 
scope  of  British  millionaires  included  their  own  direct  wielding 
of  political  power  with  its  coveted  social  opportunities.  As  we 
have  seen,  groups  of  rich  commercial  and  financial  men  had  long 
been  potent  in  Parliament.  Yet  Britain  had  never  quite  beheld 
anything  to  equal  the  spectacular  rush  that  it  now  saw  of  mil- 
lionaires reaching  for  seats  in  that  body  and  attaining  their 
goal  by  crude  wholesale  corruption. 

The  glaring  turpitude  of  this  spectacle  aroused  growing  com- 
ment and  agitation.  Elucidating  the  circumstances  and  the 
reasons  why  business  millionaires  sought  political  power,  one 
London  publication  editorialized  at  length.  There  was  no  doubt 
whatever,  it  declared,  that  if  bribery  had  not  increased,  the  ex- 
tension of  money  influence  over  elections  had.  The  tendency  of 
English  affairs  was  toward  a  great  increase  of  wealth,  and  to 
the  agglomeration  of  wealth  in  many  hands,  as  compared  with 


200  AMERICA  STRIKES  BACK 

the  total  in  previous  epochs.  When,  during  the  Napoleonic  wars, 
Pitt  introduced  the  income  tax,  he  thought  it  useless  to  frame  a 
scale  for  properties  of  more  than  £1,000,000,  yet  it  was  probable 
that  many  hundred  persons  had  now  reached  that  position. 

"Year  by  year,"  the  editorial  flowed  on,  "traders  of  all  kinds 
— contractors,  builders,  linen  drapers,  cotton  dealers,  money 
lenders,  metal  founders,  miners  [mine  owners]  and  importers 
[of  goods]  from  the  East — deposit  on  the  soil  some  three  or 
four  men  with  that  amount  and  more. 

"The  men  who  have  made  these  fortunes  are  generally  active- 
minded,  pushing  persons,  ambitious  either  for  themselves,  or 
more  frequently  for  their  sons,  and  the  quickest  road  for  an 
ambitious  man  with  any  brains  at  all  is  Parliamentary  life.  .  .  . 
English  society  is  aristocratic  with  reservations,  and  one  of  the 
reservations  is  this:  if  a  really  wealthy  man,  and  we  mean  by 
that  anybody  worth  more  than  [an  income  of  f  ]  10,000  a  year 
clear,  displays  political  ability,  all  barriers  disappear,  and  the 
greatest  in  the  land  admit  one  who,  as  they  think,  may  be 
greater  still.  Nobody  who  may  be  a  Minister  of  State  is  allowed 
to  feel  any  social  distinction.  This  exemption  is  what  men  who 
have  achieved  wealth  really  crave  for,  and  year  by  year,  the 
wealthy  candidates  who  present  themselves  to  the  boroughs 
seem  to  increase.  .  .  .  Sometimes  they  bribe  and  bribe  heavily, 
buying  not  the  score  or  two  score  of  men  who  once  held  the 
balance  of  power,  but  an  entire  majority.  ...  A  more  indirect 
form  of  corruption  is  the  purchase  of  the  borough  [vote]  under 
cover  of  public-spirited  benefactions.  ...  So  the  new  man 
with  a  full  purse  is  duly  returned  with  little  opposition."  20 

Much  truth  as  there  was  in  this  explanation  of  the  individual 
ambitions  of  British  business  millionaires,  it  did  not  by  any 
means  supply  a  full  diagnosis.  The  direct  sway  of  political 
power  for  the  protecting  and  economic  benefit  of  their  corpora- 
tions was  a  large  determining  motive.  It  was  for  this  end  that 
rival  companies  furiously  competed  at  elections  to  get  candi- 
dates elected  to  Parliament.21 

British  standards  of  estimating  millionaires  differed  greatly 
from  American.  In  America  there  ordinarily  was  a  certain  well- 
defined  existent  admiration  of  the  millionaire  as  "smart"  and 
enterprising,  and  if  not  a  condoning  of  his  freebooting,  a  recog- 


A  CHANGE  OF  TACTICS  201 

nition  of  his  shrewd  ability  in  "getting  away  with"  the  proceeds. 
But  during  the  Civil  War  widespread  and  intense  popular  indig- 
nation was  manifested  at  the  sight  of  profiteers  gorging  them- 
selves with  wealth  while  the  battle-fields  were  taking  heavy  toll. 
Whether,  however,  times  were  those  of  peace  or  war,  illicit 
methods  of  acquiring  wealth  did  not  escape  uncovering  in  Amer- 
ica. More  or  less  regularly,  as  occasion  demanded,  Congressional 
and  other  penetrating  investigations  unearthed  some  of  the 
means  by  which  huge  fortunes,  such  as  those  of  Astor,  Vander- 
bilt,  J.  Pierpont  Morgan  and  others,  were  originally  acquired  or 
were  enlarged. 

But  in  Britain  not  a  sign  of  any  spirit  of  inquiry  was  evinced; 
the  ways  by  which  fortunes  were  amassed  was  a  subject  not 
explored  either  by  Parliamentary  examination  or  private  scru- 
tiny. Facts  might  be  brought  out  fortuitously  in  the  course  of 
some  proceeding  or  other.  But  there  was  no  urgent  curiosity  as 
to  the  underlying  means  whence  came  great  business  wealth — 
no  disposition  even  to  institute  inquiry,  which  was  considered 
unwonted  and  unwarranted.  Once  anybody  attained  wealth,  he 
passed  into  a  sphere  of  immunity;  and  if  he  munificently  and 
discreetly  maneuvered  his  ascendant  way,  the  bestowal  of  a 
title  might  well  be  his  crowning  reward. 

In  keeping  with  the  exclusiveness  of  a  caste  code,  pretentious 
sections  of  the  old-established  British  aristocracy  professed  dis- 
dain for  the  moneyed  business  man.  But  this  asserted  aloofness 
was  not  allowed  to  interfere  with  the  cherishing  of  a  precious 
regard  for  their  money.  Any  attempt  to  keep  aspiring  rich  men 
in  "their  place"  was  a  futile  undertaking;  the  assigned  bounds 
were  constantly  broken  by  the  resistless  force  of  money's  en- 
croaching power.  Aristocratic  purpose  was  directed  toward  the 
feasible  policy  of  ensuring  the  complete  submissiveness  of  the 
mass  of  poor.  An  ironical  article  in  "The  Saturday  Review,"  at 
this  time,  described  the  ideas  instilled.  Over  the  poor  was  set 
an  aristocracy  "which,  it  is  supposed,  Heaven  intended  to  guide 
them,  to  care  for  them,  and  to  own  them."  The  lordly  landowner, 
the  clergyman,  all  benevolent  laymen  were  an  aristocracy  or- 
dained by  God's  will  over  the  poor.  "It  is  the  duty  of  the  poor 
to  be  obedient,  industrious,  humble  and  contented.  .  .  .  Other 
people  may  try  to  get  on,  but  the  poor  must  be  content  with 


202  AMERICA  STRIKES  BACK 

the  station  to  which  God  has  been  pleased  to  place  them.  .  .  . 
And  almost  all  modern  literature  which  attempts  to  inculcate 
the  duties  of  respectable  readers  through  the  medium  of  fiction, 
repeats  and  dilates  on  this  theory  in  every  aspect.  .  .  ." 

While  men  as  voracious  for  political  power  as  they  had  been 
for  wealth  were  corrupting  voters  en  masse, — while  this  corrup- 
tion was  a  matter  of  common  usage,  and  soon  to  call  forth  Par- 
liamentary action, — British  publications  were  denouncing  the 
state  of  American  politics.  One  magazine  self -righteously  discov- 
ered that — at  least  in  the  American  northern  States — public 
men  were  generally  held  in  disrepute:  "To  be  a  member  of  Con- 
gress and  an  influential  leader  of  parties  by  no  means  proves  a 
man  to  be  honest  or  respectable.  .  .  .  The  mob — indeed  the 
lowest  portion  of  the  mob — has  got  the  whole  political  power  in 
its  hands;  and  the  tendency  of  each  year's  immigration  is  to 
swell  the  numbers  and  power  of  the  mob."  22  Another  British 
magazine  jeered  at  Americans  as  "tactless,  rustic  and  childish," 
and  declared  that  the  American  Union  was  "going  nigh  to 
ruin."  23  Editorializing  upon  a  letter  written  by  Abraham  Lin- 
coln to  the  unconditional  Union  men  of  Illinois,  the  leading 
London  newspaper  thus  stigmatized  it:  "It  has  a  dash  of 
Yankee  slang  and  terms  of  expression  which  remind  us  alter- 
nately of  Ossian,  of  the  incoherent  utterances  of  the  Maori 
chiefs,  and  of  schoolboy  translations  of  corrupt  choruses  in 
Greek  tragedies";  yet  it  was  "tempered  by  a  lawyer-like  smart- 
ness." 24  Another  London  newspaper  heralded  the  fate  of  Amer- 
ican democracy:  "Beyond  controversy,  the  form  of  government 
and  the  institutions  which  were  held  up  as  models  of  perfection, 
have  failed,  fallen  to  pieces,  and  become  a  wreck."  25 

An  especially  flagrant  election  scandal  in  Lancaster  caused 
such  commotion  that  Parliament  could  not  withhold  ordering  an 
inquiry.  The  report  of  its  Investigating  Commission  showed  that 
in  the  Lancaster  election  £14,000  had  been  spent  in  bribery  and 
treating;  of  1,408  voters,  843  had  been  bribed.26  Benjamin  Dis- 
raeli expediently  introduced  a  bill  aimed  at  election  corruption. 
Editorial  comments  in  some  British  publications  emphasized  the 
difference  between  the  former  "rotten  borough"  system  of  buying 
a  few  then  having  votes,  and  the  newer  system,  as  disclosed  at 
Lancaster,  of  purchasing  a  majority  of  the  enlarged  electorate. 


A  CHANGE  OF  TACTICS  203 

"A  new  class  of  millionaires,"  observed  the  outspoken  "Econ- 
omist," "is  rising  up  among  us,  who  regard  money  as  mere 
counters  in  a  great  game,  and  the  greatest  game  they  can  in  our 
society  play  is  the  Parliamentary  one.  A  safe  seat  confers  at 
least  as  much  social  status,  particularly  in  London,  as  two  or 
three  thousand  acres  of  land,  and  they  would  cost  from  £80,- 
000  to  £100,000.  These  men  can  afford  £50  and  £100  a  vote, 
and  the  great  sums  tempt  electors.  .  .  .  Hitherto,  an  absurd 
idea  that  bribery  was  a  check  upon  democracy  had  immense 
secret  weight  with  the  House  [of  Commons] .  .  .  ." 

In  Parliament  at  that  time  there  happened  to  be  a  few  mem- 
bers who  bluntly  expressed  the  truth.  John  Stuart  Mill  who,  as 
we  have  seen,  had  taunted  Americans  with  dollar  chasing,  now 
had  to  admit  and  deplore  the  power  of  moneyed  men  in  England. 
As  a  member  of  Parliament  he  felt  that  he  had  won  his  way  by 
mental  ability,  and  he  resented  the  incoming  of  purse-proud, 
unlearned  men  battering  their  way  solely  by  force  of  money. 
"There  is  in  this  country,"  he  complained,  "a  large  and  growing 
class  of  persons  who  have  suddenly  and  rapidly  acquired  wealth, 
and  to  whom  it  is  worth  any  sacrifice  of  money  to  obtain  social 
position.  The  less  they  have  to  recommend  them  in  any  other 
respect — esteem,  either  by  qualities  useful  and  ornamental — 
the  more  they  are  sure  to  resort,  if  they  can,  to  the  only  infalli- 
ble means  of  gaining  their  end,  the  obtaining  of  a  seat  in  this 
House."  27 

But  the  onslaught  most  disconcerting  to  Parliament's  equa- 
nimity was  that  made  by  R.  B.  Osborne,  representing  Notting- 
ham. Dispensing  with  indirection  he  delivered  what  was  sub- 
stantially an  indictment  of  the  membership  of  Parliament  itself. 
It  was  very  pleasant,  he  sarcastically  began,  to  hear  those  little 
ebullitions  of  indignation  in  which  most  members  of  the  House 
indulged  whenever  there  was  discussion  of  bribery.  Yet,  he 
pointedly  stated,  there  were  not  thirty  members  who  obtained 
their  seats  by  fair  means;  where  bribery  was  not  used,  appeals 
to  the  prejudices  and  passions  of  voters  were,  and  such  appeals 
were  as  bad  as  bribery. 

Most  of  Osborne's  fellow  members  showed  mingled  anger 
and  dismay  at  this  arraignment  of  hypocrisy,  venality  and  dem- 
agoguery.  Not  confining  his  strictures  to  the  branch  in  which  he 


204  AMERICA  STRIKES  BACK 

sat,  Osborne  proceeded:  "Is  it  not  a  fact  that  two-thirds  of  the 
members  of  the  Upper  House  [the  House  of  Lords]  have  ob- 
tained their  peerages  because  they  had  freely  spent  their  money 
in  contested  elections?  Who  is  looked  upon  as  a  worthy  member 
of  a  party?  A  man  who  has  contested  a  county  [election]  and 
spent  some  thousands  [of  pounds]  in  the  undertaking.  Why  are 
baronets  made?  It  is  very  easy  to  get  up  in  the  House  and  make 
fine  speeches.  I  do  not  believe  that  half  of  those  whom  I  address 
are  sincere  in  their  endeavors  to  put  down  bribery.  The  fact 
is  that  one  half  of  the  House  [of  Commons]  would  not  have 
entered  it  at  all  had  they  not  happened  to  have  long  purses,  and 
had  they  not  been  prepared  to  spend  the  contents  of  those 
purses." 

Venomous  glances  shot  from  many  of  Osborne's  auditors.  He 
undauntedly  went  on:  "Bribery  will  continue  to  exist  until  it 
comes  to  be  looked  upon  as  infamous,  and  what  is  termed  un- 
gentlemanly.  At  present,  it  is  the  fashion,  and  no  man  happens 
to  think  the  worse  of  another  because  he  happens  to  have 
bribed.  .  .  .  Bribery  will  continue.  Loyal  adherents  will  be 
made  peers,  and  obsequious  followers  baronets."  28  Disraeli 
succeeded  in  passing  his  bill;  but  of  course  corruption  at  elec- 
tions was  not  uprooted. 

Accompanying  the  rush  of  moneyed  magnates  into  Parliament 
came  constant  exaltations  of  London's  greatness,  measured 
solely  by  its  money-making  capacity.  Commercial  or  other  self- 
puffery  was  professedly  viewed  in  Europe  as  an  atrocious  Ameri- 
can vice.  Many  American  communities  had  vied  with  one  an- 
other in  each  proclaiming  its  remarkable  growth  in  population, 
industry  and  commerce.  But  this  elation  was  not  unnatural  and 
without  reason  in  a  country  which  in  a  short  time  saw  settle- 
ments go  through  quick,  expanding  stages  and  become  trans- 
formed into  bustling  cities.  At  the  end  of  the  Civil  War,  however, 
there  were  not  many  evidences  of  this  glorifying  spirit,  except 
in  the  far  West,  distant  from  the  arenas  of  war.  Prostrate  and 
impoverished,  the  South  had  its  pressing  problems,  and  likewise 
had  the  North  with  the  war's  aftermath. 

An  old,  stable  city  such  as  London  with  its  recognized  emi- 
nence could  not  plead  the  same  justification  for  excesses  of  self- 
booming  as  could,  let  us  say,  upcoming  cities  of  the  grade  of 


A  CHANGE  OF  TACTICS  205 

Chicago,  Cincinnati  or  San  Francisco.  Yet,  dealing  with  pro- 
posals for  an  improved  system  of  taxation  in  1866,  one  publica- 
tion jubilated:  "There  is  a  real  wish  to  make  London  worthy 
of  its  position  as  the  greatest,  richest  and  most  populous  city 
in  the  world.  .  .  .  The  richest  persons  in  the  Empire  throng 
her;  her  scale  of  living  is  most  magnificent;  her  rents  highest; 
her  opportunities  of  money-making  widest."  29  So  ceaseless  was 
the  chorus  of  self-praise  that  another  London  publication  was 
driven  to  make  protest.  "London,"  it  impatiently  declared,  "is 
never  tired  of  admiring  its  own  vastness  and  wealth;  its  popula- 
tion, greater  than  that  of  many  kingdoms;  its  trade,  larger  than 
that  of  India;  the  annual  addition  of  a  new  city  to  its  extent  and 
resources.  It  is  well  before  the  next  hymn  is  sung  to  Mammon 
and  his  glory  to  remember  this  little  fact:  The  number  of  Lon- 
don paupers  relieved  by  legal  alms  on  the  last  day  of  February 
in  this  year  [1868]  was  156,650.  Add  the  professional  beggars, 
the  tramps,  and  the  people  who  do  not  beg  but  remain  dinnerless, 
and  we  shall  find  that  London  contains  a  population  as  great 
as  that  of  Leeds  with  nothing  to  eat.  The  social  cohesion  must 
be  strong  which  stands  that  strain."  30 

But  pauperism  was  only  one  dark  phase  of  the  abysmal  con- 
trasts to  wealth.  When,  in  1870,  W.  E.  Forster  introduced  in 
Parliament  his  bill  for  elementary  education,  disclosures  showed 
the  widespread  illiteracy.  In  England  more  than  a  million  chil- 
dren between  six  and  ten  years  old,  and  half  that  number  be- 
tween the  ages  of  ten  and  twelve,  Forster  stated,  were  utterly 
without  education.  A  million  and  a  half  other  children  were 
nominally  "on  the  registers,"  but  their  attendance  was  irregular 
in  such  schools  as  received  Government  grants  of  funds.31 

The  contrast  with  Saxony,  Switzerland  or  Prussia,  attested 
A.  J.  Mundella,  representing  Sheffield,  "is  enough  to  make  an 
Englishman  blush  for  his  country."  Citing  recent  Parliamentary 
reports  on  education,  Mundella  ominously  went  on:  "When  the 
future  historian  writes  the  history  of  his  country  some  of  its 
blackest  pages  would  be  found  to  be  based  upon  those  reports. 
According  to  them,  the  estimated  population  of  Birmingham, 
Leeds,  Liverpool  and  Manchester  is  1,500,000;  the  average  at- 
tendance in  all  the  schools  124,000,  or  allowing  for  the  children 
of  the  middle  classes,  for  whom  one  shilling  and  upwards  was 


206  AMERICA  STRIKES  BACK 

paid,  150,000.  And  what  a  class  of  schools  some  of  these  are! 
Cellar  schools,  garret  schools,  and  all  sorts  of  miserable  and 
pestiferous  places." 82  Mundella's  figures  were  substantially 
confirmed  by  another  speaker,  J.  T.  Hibbert.  The  vast  illiteracy 
in  London  was  indicated  by  T.  Salt,  still  another  proponent  of 
the  bill.  London  with  its  population  of  three  millions,  Salt  bade 
his  hearers  note,  contained  about  half  a  million  children  of 
school  age;  an  estimate  made  in  a  single  square  mile  denoted 
that  23,000  children  were  "growing  up  in  more  or  less  entire 
ignorance."  33  Despite  emasculations  in  the  House  of  Lords, 
Forster's  bill  was  passed.  But  not  until  twenty-one  years  later 
was  payment  of  fees  in  elementary  schools  abolished. 


CHAPTER  XVI 
"WANT  OF  SOUL  AND  DELICACY" 

"BEFORE  I  ever  went  to  America,  and  when  I  had  no  expecta- 
tion of  going  there,  I  published  under  the  title  'A  Word  About 
America'  ...  a  few  modest  remarks  on  what  I  thought  civi- 
lization in  the  United  States  might  probably  be  like.  I  had 
before  me  a  Boston  newspaper  article  .  .  .  and  taking  this 
article  for  my  text,  I  observed  that  from  all  I  had  read  and  could 
judge  I  should  for  my  part  expect  to  find  the  rather  such  and 
such  other  things,  which  I  mentioned."  * 

That  British  authors  were  swayed  by  preconceived  ideas  of 
America  was  consistently  shown  by  the  tenor  of  their  produc- 
tions. But  it  was  left  to  Matthew  Arnold,  as  cited  above,  to 
reveal  in  so  many  words  how  perhaps  the  foremost  English 
literary  critic  of  his  time  could  pass  judgment  upon  a  country 
without  ever  seeing  it. 

What,  it  is  pertinent  to  ask,  would  have  been  the  reception 
in  England  of  a  plague  of  books  written  by  Americans  on  the 
people  there?  Especially  of  books  grounded  on  preconceptions 
and  lacking  in  first-hand  knowledge?  Without  doubt,  the  au- 
thors would  have  been  hooted  and  their  work  impugned  as  com- 
petent exhibits  of  Yankee  effrontery.  Yet  when  that  course  was 
pursued  by  Arnold  and  other  British  writers  professing  to  deal 
with  American  life,  it  was  accepted  in  Britain  as  entirely 
proper  and  commendable. 

Fixed  ideas  had  long  dominated  Arnold.  When  young  he  had 
developed  an  enormous  respect  for  the  British  aristocracy's 
manners,  reticence  and  governing  capacity,  while  at  the  same 
time  he  deplored  its  lack  of  culture  and  intelligence.  Sorrow- 
fully, he  viewed  power  as  slipping  from  the  cherished  aris- 
tocracy into  the  hands  of  the  multitude  which,  he  was  con- 
vinced, could  never  regulate  its  affairs  or  govern  properly  unless 
it  discarded  individualism  and  centered  power  in  a  tran- 

207 


208  AMERICA  STRIKES  BACK 

scending,  all-powerful  State.  He  attacked  the  middle  class  in 
particular  as  Philistine — that  is,  antagonistic  to  culture.2  As 
he  grew  older,  no  English  class  seemed  to  have  his  approval. 
He  criticized  the  upper  class  as  materialized,  the  middle  class 
as  vulgarized,  and  the  lower  class  as  brutalized — notwithstand- 
ing which  general  disapprobation  he  retained  a  deep-seated  re- 
spect for  the  aristocracy  and  gentry,  and  fervently  pleaded 
their  cause. 

Some  years  before  he  visited  America,  he  delivered  an  ad- 
dress on  "Equality."  Social  equality  he  condemned  as  demoral- 
izing; and  he  warmly  supported  views  expressed  by  various 
noted  Englishmen  on  the  fallacies  of  that  doctrine,  and  on  the 
superior  leadership  and  splendor  of  the  British  upper  classes. 
Arnold  had  slight  patience  with  any  advocate  of  equality,  po- 
litical or  other.  George  Sand's  pronouncement,  that  the  human 
as  well  as  the  social  ideal  was  achievement  of  equality,  was  dis- 
missed by  Arnold  as  the  persiflage  of  "an  enthusiast."  3 

Filled  with  such  views  Arnold  made  two  visits  to  America, 
one  in  1883  and  the  other  in  1886.  He  held  then  an  official  posi- 
tion as  inspector  of  English  schools;  and  his  literary  reputa- 
tion, both  in  his  own  right  and  as  professor  of  poetry  at  Oxford, 
had  long  since  preceded  him.  In  person  Arnold  was  impressive, 
with  his  broad-shouldered,  almost  burly,  figure;  but  as  a  lec- 
turer he  was  not  forceful,  so  poor  was  his  delivery.  His  manner 
of  speech,  however,  was  no  impediment  to  the  spread  of  his  in- 
fluence. Every  word  he  uttered  was  so  highly  esteemed  by  his 
following  as  to  be  published  and  republished  in  books  that 
reached  wide  audiences. 

Before  Arnold's  advent,  foreign  critics  on  tour  of  America 
had  condescended  to  give  talks  or  interviews.  But  he  virtually 
started  the  fashion  for  exotic  critics  who,  as  a  formal  under- 
taking, lectured  down  to  Americans  on  the  ugliness,  greed  and 
vulgarity  of  American  life.  The  supine  willingness  of  some 
Americans  to  pay  for  the  privilege  of  hearing  their  national 
customs  derided  has  been  one  of  the  oddest  phenomena  of  our 
cultural  history.  In  a  European  country  the  mere  suggestion 
of  handing  over  money  to  listen  to  visiting  lecturers  berate  and 
affront  the  people  they  addressed  would  have  been  deemed  sheer 
lunacy.  How  much  of  this  American  patronage  of  alien  critic- 


"WANT  OF  SOUL  AND  DELICACY"  209 

lecturers  has  been  financed  by  tolerant  curiosity  is,  of  course, 
a  question  which  need  not  be  discussed.  The  point  worth  noting 
here  is  that,  while  European  critics  have  attacked  every  con- 
ceivable aspect  of  American  rapacity,  they  have  preserved  a 
confederation  of  discreet  silence,  from  Arnold's  time  till  now,4 
on  the  workings  of  this  lecture  industry  so  agreeable  to  their 
patriotic  impulses — and  often  so  satisfactory  to  their  indi- 
vidual pockets. 

All  along — so  Arnold  admitted  without  a  trace  of  apology 
or  compunction — he  had  criticized  Americans  on  intangible 
grounds.  In  the  past,  he  conceded,  he  had  perhaps  speculated 
too  much  about  America  in  the  abstract.  Then,  apparently  to 
prepare  his  hearers  for  something  more  specific,  he  plunged 
into  a  series  of  suppositions.  But,  taking  these  in  turn  as 
granted  premises,  he  launched  into  denunciation.  He  "sup- 
posed" that  in  a  democratic  country  such  as  America,  the  new- 
ness, the  magnitude,  the  press  of  business,  and  sheer  freedom 
and  equality  must,  perforce,  produce  a  danger.  Treating  this 
imagined  danger  as  a  demonstrated  fact,  he  proceeded  in  the 
most  positive  terms  to  define  it.  The  danger  threatening  Ameri- 
cans, so  Arnold  told  them,  lay  "in  the  absence  of  the  discipline 
of  respect;  in  hardness  and  materialism,  exaggeration  and 
boastf ulness ;  in  a  false  smartness,  a  false  audacity,  a  want  of 
soul  and  delicacy."  Further,  he  arraigned  Americans  as  af- 
flicted "with  tall  talk  and  self-glorification,"  and  designated 
more  particularly  that  "the  new  West  promises  to  beat  in  the 
game  of  brag."  5 

Had  Arnold  even  partially  understood  American  conditions, 
one  further  count  of  his  indictment — that  of  political  corrup- 
tion— could  have  been  made  definite  and  strong.  In  this  respect 
his  case  would  not  have  been  open  to  challenge.  It  would  not 
have  presented  itself  as  a  shadowy  reliance  upon  glimpses  or 
gossip.  Political  corruption  in  America  was  a  glaring,  ugly 
commonplace.  Investigation  after  investigation  had  disclosed 
proofs  of  it ;  and  these  were  matters  of  the  most  ordinary  knowl- 
edge. But  the  best  that  Arnold  could  do  was  to  characterize  as 
"thick-and- thin-skin  American  patriots"  any  who  advanced 
against  his  prejudices  the  opinion  that  political  corruption  was 
no  more  inveterate  in  America  than  in  England. 


210  AMERICA  STRIKES  BACK 

A  few  years  before  Arnold  visited  America  a  notable  scandal 
in  England  had  again  shown  the  great  difference  between  the 
American  policy  of  openly,  frankly  uncovering  its  corruption, 
and  the  British  method  of  stifling  disclosures. 

Parliament  had  long  since  progressed  to  the  point  of  investi- 
gating factory  and  social  conditions.  But  it  had  assiduously 
withheld  from  any  investigation  of  high  finance,  which  was 
looked  upon  as  an  inviolate  region.  However,  in  1875,  Parlia- 
ment found  that  it  could  no  longer  provide  this  immunity.  The 
reasons  were: 

In  1867-1873  bonds  totaling  about  £10,000,000  of  loans 
sought  by  Honduras  and  other  foreign  countries  had  been 
floated  by  London  bankers.  These  secretly  employed  a  corps  of 
stockbrokers  who  deftly  manipulated  the  market,  juggling 
prices  to  high  quotations,  whereupon  the  bonds  were  unloaded 
upon  the  British  public.  Later,  news  leaked  out  that  the  Hon- 
duras loan  was  based  upon  insufficient,  or  rather  upon  well- 
nigh  worthless,  security.  There  ensued  a  financial  collapse  en- 
meshing investors,  including  influential  persons,  in  large  losses. 
Parliament  could  not  resist  the  outcry,  and  ordered  investiga- 
tion. Herran,  the  Honduran  Minister  to  Great  Britain,  wrote 
a  sensational  letter  to  the  Select  Parliamentary  Committee. 
First,  he  informed  the  Committee  that  before  the  1867  loan 
had  been  put  forth,  the  revenues,  domains  and  forests  of 
Honduras  had  already  been  pledged  for  two  previous  loans. 
Next,  he  stated,  he  had  tried  to  prevent  Captain  Bedford 
Pirn,  M.P.,  improperly  representing  himself  as  Special  Com- 
missioner for  Honduras,  from  floating  the  new  unsecured  loan. 
On  his  part,  Pirn  had  accused  Herran  of  opposition  to  him  be- 
cause he,  Pirn,  had  declined  to  pay  booty — £40,000  to  Herran, 
and  £16,000  to  the  Consul-General  of  Honduras.  Herran  de- 
nounced Pirn's  charges  as  calumny.  After  this  letter  had  been 
read  before  the  Committee,  reporters  for  "The  Times"  and 
"The  Daily  News,"  of  London,  made  formal  application  to  the 
chairman  of  the  Select  Committee  to  see  so  startling  a  com- 
munication. He  gave  permission.  They  then  published  it,  along 
with  such  matters  as  they  could  gather  of  the  inquiry.6 

Urging  that  this  publication  of  proceedings  before  the  Select 
Committee  was  a  most  serious  infraction  of  House  of  Com- 


"WANT  OF  SOUL  AND  DELICACY"  211 

mons'  dignity,  Charles  Lewis,  member,  made  stern  complaint 
in  Parliament.  He  called  to  attention  the  resolution  of  1837 
forbidding  such  publication.  "There  are,"  said  Lewis,  "prece- 
dents in  the  *  Journals  of  the  House'  having  exercised  its  plenary 
authority  of  imprisonment  on  those  who  have  offended  in  this 
respect."  He  then  moved  that  the  publication  in  the  two  news- 
papers was  a  breach  of  the  privileges  of  the  House  of  Com- 
mons. His  motion  was  carried  by  an  overwhelming  vote.  By 
similar  large  majorities  the  arrest  of  Francis  Goodlake  and 
Winking  Hales,  publishers  of  the  offending  newspapers,  was 
ordered.7 

This  plan  to  terrorize  and  gag  the  press  caused  a  com- 
motion in  public  opinion.  The  proscriptive  majority  of  Parlia- 
ment speedily  learned  that  it  could  not  safely  attempt  the  re- 
pressive methods  of  former  times.  But  what  perhaps  almost 
equally  created  surprise  was  the  novel  sight  of  a  Parliamentary 
investigating  committee  exploring  the  sinuous  channels  of 
financial  crookedness.  "This  Committee  has  got  into  a  new 
region,"  editorialized  "The  Economist,"  of  London,  on  April 
17,  1875.  "It  is  investigating  'business'  and  every  syllable  ori 
business  is  interesting.  Every  word  which  passes  before  that 
Committee  may,  in  its  effect,  take  money  from  some  one,  or 
give  money  to  some  one.  .  .  .  The  lying  on  oath  before  the 
Committee  must  have  been  enormous,  for  the  contradictions 
contained  in  it  are  so.  There  are  whole  sections  which  read  like 
products  of  Asiatic  mendacity.  ...  If  the  Committee  were  to 
stop  now,  or  if  its  future  operations  are  comparatively  inef- 
ficient, it  will  give  the  gangs  of  'operators'  who  have  not  been 
exposed,  a  pre-eminent  advantage  over  those  who  have."  Then 
dealing  with  the  measures  against  the  publishers  of  "The 
Times"  and  "The  Daily  News,"  the  editorial  agreed  that  un- 
questionably a  breach  of  privilege  had  been  committed:  "the 
proceedings  of  a  Select  Committee  of  Parliament  are  as  sacred 
as  those  of  Parliament,  and  those  who  divulge  them  may  be 
punished."  But,  concluded  the  editorial,  to  enforce  such  rules 
in  this  case  would  be  tyranny. 

The  action  against  the  newspaper  publishers  was  ridiculed 
in  the  House  of  Commons  by  Sir  William  Vernon  Harcourt,  a 
prominent  Liberal.  The  House,  he  declared,  "was  becoming  the 


212  AMERICA  STRIKES  BACK 

laughing-stock  of  the  nation.7'  Having  noted  the  strength  of  a 
public  opinion  adverse  to  the  House  of  Commons'  course, 
Premier  Disraeli  sagaciously  made  a  motion,  which  was  adopted, 
discharging  the  order  summoning  Goodlake  and  Hales.  By  this 
move  the  proceedings  against  them  were  dropped.8  Those  pro- 
ceedings, stated  "The  Spectator,"  of  London,  on  April  24,  1875, 
were  an  absurdity,  and  the  Commons  had  been  forced  to  aban- 
don its  "rather  silly  position."  However,  the  House  of  Com- 
mons' retreat  on  this  occasion  did  not  signify  any  fundamental 
change  of  attitude.  One  member — Sullivan — proposed  the  in- 
stituting of  a  reform  which  should  "relieve  the  public  press  from 
the  hazards  at  which  it  now  discharges  important  and  useful 
functions  towards  this  House  and  towards  this  country."  The 
Government,  Disraeli  replied,  had  no  intention  of  introducing 
any  such  innovation.9  A  few  days  later,  in  fact,  reporters  were 
ordered  excluded  from  the  House  of  Commons,  and  during  their 
absence,  speaking  "amid  great  excitement,"  Disraeli  relieved 
his  feelings.  He  deprecated  the  disturbing  tactics  of  some  mem- 
bers of  the  House,  which  he  eulogized  as  "an  assembly  of  Eng- 
lish gentlemen."  It  was  only,  he  explained,  to  foil  these  tactics 
of  members  who  favored  admitting  "strangers"  (reporters)  that 
he  would  move  suspending  during  the  session  the  rule  for  their 
exclusion.10  The  adoption  of  his  motion  was  a  notification 
anew  by  the  House  of  Commons  that  solely  by  the  vouchsaf- 
ing of  its  grace  and  pleasure  were  reporters  allowed  in  its  pre- 
cincts. 

We  must  not  at  this  opportune  place,  however,  overlook  the 
Select  Committee's  findings  after  disentangling  the  web  of 
fraud  perpetrated  in  the  floating  of  the  loans.  Jay  Gould's 
"Black  Friday"  operations  and  some  other  great  American 
financial  marauding  transactions  were  given  noisy  publicity  in 
Europe.  But  American  newspapers  did  not  provide  their  public 
with  even  a  passable  idea  of  the  magnitude  of  the  swindles  and 
thefts  in  England.  Nor  had  any  American  investigating  com- 
mittee ever  more  severely  scored  the  acquisitiveness  of  men  of 
the  Gould- Vanderbilt  type  than  did  this  Parliamentary  Select 
Committee  score  the  cupidity  of  whole  classes  of  Englishmen 
who  came  under  its  purview.  Judged  by  the  customary  restraint 
of  British  reports,  its  language  was  exceptionally  strong.  A 


"WANT  OF  SOUL  AND  DELICACY"  213 

famous  report  it  was;  yet  literary  men  like  Arnold  visiting  and 
chiding  America  knew  or  seemed  to  know  nothing  of  it,  or  of 
simultaneous  disclosures  that  showed  damaging  realities  in 
their  own  country. 

Only  a  glancing  insight  into  the  Select  Committee's  volumi- 
nous report  can  be  given  here.  Lying  statements  spread  as  to  the 
Honduras  loan  "had  the  natural  effect  of  deceiving  the  public 
.  .  .  tempting  them  to  become  purchasers  of  bonds  [at  prices] 
far  above  their  value."  These  and  other  operations  were  car- 
ried on  secure  from  inquiry  by  law  enforcement  officials  and 
with  the  connivance  of  certain  newspapers.  The  means  used  to 
influence  public  investment  the  Committee  branded  as  "fla- 
grantly deceptive."  Grossly  false  statements  were  circulated  in 
floating  the  San  Domingo  loans.  Bought  by  a  London  syndicate 
of  bankers  at  £50  per  £100  bond,  the  Egyptian  loan  was  issued 
to  the  public  at  the  price  of  £80  or  £84. 

"It  is  true,"  the  Select  Committee  commented,  "that  the 
credulity  and  cupidity  of  certain  classes  of  the  community  have 
blinded  them  to  the  danger  of  embarking  in  speculations  such 
as  your  Committee  have  described.  They  appear  to  have  meas- 
ured the  value  of  the  promises  held  out  to  them,  not  by  any 
rule  of  experience,  but  by  their  own  sanguine  expectations,  and 
thus  they  have  fallen  a  prey  to  those  who,  by  trading  on  their 
credulity,  have  obtained  their  money,  and  then  betrayed  their 
interests."  And  appertaining  to  this  betrayal:  "Enormous  sums 
have  been  abstracted  from  the  Honduras  Loans  and  appropri- 
ated among  those  who  were  entrusted  with  its  management." 
Finally,  the  London  Stock  Exchange  was  severely  criticized  for 
its  practices  of  indiscriminately  dealing  in  all  securities,  whether 
good  or  bad.11  Unlike  reports  of  American  investigating  com- 
mittees, however,  this  report  avoided  fixing  the  responsibility  in 
personal  terms. 

Another  noteworthy  example  of  the  equivocal  processes  in 
the  British  Parliament  was  furnished  by  exciting  disclosures. 
As  a  young  man  Samuel  Plimsoll  underwent  extreme  destitu- 
tion and  learned  to  sympathize  with  the  oppressed  poor.  Later, 
upon  attaining  a  competence,  he  devoted  his  energies  to  social 
reform.  He  particularly  agitated  against  what  were  called  "cof- 
fin ships."  These  were  unseaworthy  and  overloaded  vessels, 


214  AMERICA  STRIKES  BACK 

often  heavily  insured  by  the  owners,  who  had  the  sanction  of 
British  law  in  operating  ships  which  were  a  constant  menace  to 
the  lives  of  the  crews. 

Shipowners,  powerful  because  members  of  Parliament,  long 
resisted  efforts  at  remedial  legislation.  But  in  1862  they  made 
an  appearance  of  yielding,  and  an  act  was  passed  giving  but  the 
weakest  powers  of  regulation  to  the  Board  of  Trade.  In  1868 
Plimsoll  was  elected  to  Parliament  for  Derby,  and  four  years 
later  wrote  a  book,  "Our  Seamen,"  which  made  a  profound  im- 
pression in  Britain. 

To  settle  the  ferment  of  public  opinion,  a  Government  bill 
dealing  with  the  shipping  evil  was  introduced  in  Parliament  in 
1875.  The  measure  was  flaccid,  which  Plimsoll  well  knew;  but 
on  the  principle  that  any  kind  of  relief  was  better  than  none, 
he  decided  to  support  it.  Opposition  pressure  of  shipowners  in 
and  out  of  Parliament  was  brought  to  bear,  and  Disraeli,  on 
July  22,  1875,  tersely  announced  that  the  Government  would 
abandon  the  bill. 

Deeply  enraged,  Plimsoll  denounced  "the  shipowners  of  mur- 
derous tendencies  outside  the  House,  and  who  are  immediately 
and  amply  represented  inside  the  House,  and  who  have  frus- 
trated and  talked  to  death  every  effort  to  procure  a  remedy  for 
this  state  of  things."  Before  his  hearers  could  recover  from  their 
consternation  at  such  plain  speech,  Plimsoll  passionately  went 
on:  "Continually,  every  winter,  hundreds  and  hundreds  of 
brave  men  are  sent  to  death,  their  wives  are  made  widows  and 
their  children  are  made  orphans  in  order  that  a  few  speculative 
scoundrels  may  make  unhallowed  gains.  There  are  shipowners 
in  this  country  of  ours  who  have  never  either  built  a  ship,  or 
bought  a  new  one,  but  who  are  simply  what  are  called  ' ship- 
knockers.'  "  The  Speaker  called  Plimsoll  to  order.  The  command 
was  not  effective.  Shaking  his  fist  in  the  Speaker's  face,  Plimsoll 
resumed:  "I  am  determined  to  unmask  the  villains  who  send  to 
death  and  destruction — "  The  flustered  Speaker  again  called 
Plimsoll  to  order,  and  remarked  that  presumably  Plimsoll  did 
not  apply  the  epithet  of  villains  to  any  member  of  the  House. 
"I  did,  Sir,"  Plimsoll  said,  "and  I  do  not  mean  to  withdraw  it." 
Such  language,  the  Speaker  declared,  was  unparliamentary. 
Again  Plimsoll  declined  to  retract.12  Disraeli  moved  that  be  be 


"WANT  OF  SOUL  AND  DELICACY"  215 

reprimanded,  but  upon  Lord  Harrington's  politic  suggestion  to 
allow  Plimsoll  time  for  reflection,  disciplinary  action  was  de- 
layed for  a  week. 

For  his  transgression  of  Parliamentary  conventions  Plimsoll 
eventually  made  due  apology,  but  in  no  respect  did  he  desist 
from  attacks  in  the  House  of  Commons  upon  the  diabolism  of 
unscrupulous  shipowners.  Returning  to  the  subject  later  he 
presented  specific  facts  as  to  the  devastation  caused:  "I  can 
say  without  exaggeration  that  since  the  act  of  1862  nearly 
20,000  British  subjects  have  been  drowned,  and  nearly  £30,000,- 
000  of  British  property  have  gone  to  the  bottom  of  the  sea." 
His  statement  went  uncontradicted.  Shipowners,  he  said,  were 
well  aware  of  the  dangers  of  plying  unserviceable  vessels,  but 
every  time  any  attempt  was  made  to  get  remedial  legislation,  he 
charged,  they  invariably  strangled  the  proposals.  Cries  of  "No! 
No!"  Plimsoll  maintained  that  his  charge  was  true.18 

Already  stirred  by  Plimsoll 's  campaign  to  ameliorate  the  lot 
of  the  seamen  of  the  merchant  marine,  Britain's  pride,  public 
opinion  now  became  heated  at  the  sight  of  one  lone  man,  a 
humanitarian,  having  to  battle  in  Parliament  against  massed 
and  obdurate  self-interest.  The  subject  matter  at  issue  was  no 
intricate  affair  of  abstruse  economics,  but  a  very  simple  one 
which  could  be  understood  by  everybody  and  which  appealed  to 
elemental  feelings  as  well  as  to  fairness  and  sense  of  justice. 
Intense  popular  agitation  forced  a  reluctant  Government  to 
change  front,  and,  in  1876,  Parliament  passed  an  act  vesting 
in  the  Board  of  Trade  stringent  regulative  powers.  From  Plim- 
soll's  efforts  came  the  term  "PlimsoH's  mark,"  denoting  the 
limit  to  which  a  ship  could  be  loaded.  And  so  popular  was 
Plimsoll  that,  after  he  retired  from  Parliament  in  1880,  thirty 
different  constituencies  vied  in  offering  him  election  to  a  seat 
in  the  House  of  Commons. 

Purely  in  chronological  order  we  shall  at  this  point  consider 
another  example  of  the  difference  between  the  American  and 
the  British  systems.  In  America  municipal  common  councils  in 
the  large  cities  were  composed  mainly  of  professional  ward  poli- 
ticians, and  not  infrequently  a  considerable  number  of  members 
were  saloon  keepers.  The  tone  of  these  bodies  was  low,  and 
bribery  scandals  were  numerous.  By  comparison,  British  mu- 


216  AMERICA  STRIKES  BACK 

nicipal  councils  were  looked  upon  as  highly  respectable,  filled 
as  they  were  with  staid  business  men  invulnerable  to  bribery. 
But  the  kind  of  corruption  festering  among  them  was  shown 
by  a  statement  in  Parliament  in  1875.  Due  largely  to  a  ten-year 
fight  waged  by  the  medical  journal,  "The  Lancet"  of  London, 
a  series  of  acts  against  food  and  drug  adulteration  had  been 
grudgingly  passed  by  Parliament.  Every  one  of  these  acts  was 
emasculated  by  some  provision  or  other  which  largely  nullified 
its  force.  The  usage  of  dealers  was  to  dilute  milk  with  one- 
fourth  part  of  water.  Alum  was  heavily  mixed  with  flour.  Sul- 
phuric acid  was  put  in  vinegar,  and  sand  in  sugar.  Tea,  coffee, 
cocoa,  mustard,  beer  and  many  other  drinks  and  food  were 
badly  adulterated,  and  drugs  and  nostrums  often  contained 
deleterious  or  poisonous  substances.14  The  same  evils  abounded 
in  America  at  the  same  time,  and  in  both  Britain  and  America 
considerable,  and  often  large,  private  fortunes  came  from  the 
business  of  adulteration. 

Britain  much  preceded  America  in  arriving  at  legislation, 
passed  in  1872,  to  compel  honest  labeling,  so  that  the  buyer 
should  know  what  he  was  purchasing.  But  the  gaping  defect  in 
British  law  was  the  absence  of  any  adequate  provision  for  pre- 
venting adulteration  and  for  punishing  offenders.  On  this  latter 
point,  G.  M.  W.  Sandford,  a  member,  charged  in  the  House  of 
Commons  that  analysts  or  inspectors  were  appointed  by  the 
Government  upon  the  express  understanding  that  they  should 
take  no  punitive  action  against  adulterators.  Sandford  went  on: 
"If  you  consider  for  a  moment  of  what  persons  the  municipal 
councils,  especially  in  large  towns,  are  to  a  great  extent  com- 
posed, you  will  perceive  that  they  are  the  very  class  of  persons 
to  be  proceeded  against."  Which  statement,  thoroughly  true, 
not  one  of  his  hearers  disputed.15 

For  another  and  different  example  of  how  English  local  of- 
ficials ran  affairs,  let  us  turn  to  the  municipal  council  of  Lon- 
don, called  the  London  Corporation.  In  Queen  Victoria's  speech 
to  Parliament,  in  1882,  a  reference  was  made  to  the  need  of 
reforming  this  body.  But  the  London  municipal  authorities 
wanted  no  reforming.  They  immediately  began  concocting  meas- 
ures to  prevent  the  change,  and  to  counter  the  agitation  carried 
on  by  the  Municipal  Reform  League.  After  a  bill  had  been 


"WANT  OF  SOUL  AND  DELICACY"  217 

introduced  in  Parliament,  in  1884,  to  reconstitute  the  London 
Corporation,  the  opposition  of  the  politico-business  men  in  this 
body  increased.  Charges  were  made  in  Parliament  of  the  cor- 
rupt use  of  city  funds  by  the  London  Corporation  in  seeking  to 
defeat  the  reform  bill.  A  Select  Committee  was  ordered  to  in- 
vestigate. 

Parenthetically,  it  may  here  be  observed,  these  were  the 
years  in  which  British  authors,  editors  and  speakers  were  point- 
ing out  the  great  thefts  and  frauds  committed  by  the  Tweed 
regime,  which  had  for  some  years  governed  New  York  City,  as 
typical  of  the  corruption  of  American  municipalities.  But  more 
than  a  decade  before  these  charges  against  the  London  Corpora- 
tion, the  Tweed  regime  had  been  overthrown.  Tweed  died  in 
jail,  and  his  chief  accomplices  had  fled  to  avoid  prosecution. 
Tammany  Hall  thereby  learned  the  lesson  of  refraining  from 
the  dangerous  business  of  stealing  public  funds  outright.  While 
in  Britain  high  moralizing  was  done  on  American  official  ras- 
cality, the  municipal  officials  of  London,  to  advance  their  own 
interests,  were  using  city  funds  in  the  manufacture  of  public 
opinion  and  in  trying  to  influence  Parliament. 

The  Select  Committee  reported:  From  1882  to  1888  £19,- 
550  of  city  money  had  been  thus  taken  and  expended  by  the 
London  Corporation.  The  agents  of  this  had  engaged  astute 
politicians  and  others  to  organize  meetings  which  passed  strong 
resolutions  against  the  reform  proposals,  and  newspaper  report- 
ers had  been  engaged  to  write  favorable  accounts.  According  to 
the  Select  Committee's  report,  packed  meetings  were  an  ac- 
tivity of  both  sides;  "the  various  associations  subsidized  by  the 
Corporation,  and  also  the  Municipal  Reform  League,  packed 
their  own  meetings  to  a  greater  or  lesser  extent."  An  illuminat- 
ing insight  this  report  gives  into  the  moulding  of  British  public 
opinion,  represented  by  the  writers  of  that  country  as  so  honest 
and  spontaneous.  The  Select  Committee  itemized  various  other 
ways  in  which  city  funds  had  been  distributed  in  the  campaign. 
But  the  sapient  Select  Committee  could  not  bring  itself  to  see 
that  there  was  any  barefaced  looting  in  the  transaction.  The 
charge  of  malversation  had  not,  "in  its  opinion,"  been  sus- 
tained; but  it  did  find  that  "improper  use"  of  a  portion  of  the 
city's  funds  had  been  proved.16 


218  AMERICA  STRIKES  BACK 

But  for  their  apparent  eagerness  to  blind  themselves  to  the 
furious  race  for  wealth  within  their  own  spheres  of  influence, 
European  critics  of  American  materialism  could  have  found 
in  Germany  a  much  nearer  exhibition  of  surging  industrialism. 
There,  thanks  to  the  vast  indemnity  in  gold  exacted  from 
France  after  the  Franco-Prussian  War  of  1870,  an  extraordinary 
impetus  was  given  to  the  formation  of  new  enterprises. 

Germany  was  saturated  with  stock  issues  between  1871  and 
1874;  more  than  3,000  million  marks  of  paper  values  were  then 
issued  by  a  legion  of  new  corporations.  A  delusion  of  sure 
riches  enveloped  countless  Germans  in  a  speculative  frenzy. 
Many  of  them  subsequently  found  themselves  wiped  out  in  a 
crash;  but  this  did  not  halt  the  onward  sweep  of  Germany's  in- 
dustrialism, which  based  itself  upon  a  secure  foundation  of 
underselling  in  competitive  markets.  In  1886  Germany  boasted 
a  grand  array  of  more  than  a  thousand  corporations,  an  out- 
pouring of  stock  issues  exceeding  4,000  million  marks,  and  bond 
flotations  reaching  nearly  six  hundred  million  marks. 

So  inveterately  bent  was  German  industrialism  upon  advanc- 
ing its  hold  by  any  means,  however  discreditable,  that  in  one 
sense  Germany  was  an  outlaw  among  nations.  In  all  industrial 
countries  fraud  in  making,  stamping  and  selling  merchandise 
was  so  common  as  to  be  an  institution.  The  decent  manufacturer 
was  either  hard  driven  in  contesting  with  it,  or  else  for  sheer 
self-preservation  had  to  abandon  scruples  and  descend  to  the 
same  level.  Certain  British  manufacturers  made  inferior  goods 
bearing  the  names  of  widely  reputed  French  makers.  Belgian 
foundries  exported  into  Britain  itself  iron  stamped  as  "best 
Staffordshire"  which  was  sold  at  so  low  a  price  that  Stafford- 
shire mills  could  not  compete.  These  are  but  two  of  a  multitude 
of  instances.  But  now  Germany  proved  that  it  could  not  only 
carry  the  process  of  fraud  to  an  unparalleled  extreme  but  could 
swamp  the  markets  of  other  countries  in  a  ruinous  competition. 
To  lessen  the  world-wide  effects  of  fraudulent  stamping  of 
merchandise,  many  Governments,  including  those  of  Great 
Britain,  America,  France,  Italy,  Norway,  Sweden,  Switzerland 
and  other  nations,  had  participated  in  a  convention  sanctioning 
the  Union  for  the  Protection  of  Industrial  Property.  An  agree- 
ment was  made  to  seize  all  manufactured  goods  the  origin  of 


"WANT  OF  SOUL  AND  DELICACY"  219 

which  was  fraudulently  labeled.  The  German  Government  re- 
fused to  accede. 

Rivalry  in  fraud  briskly  continued.  We  may  give  full 
credence  to  the  evidence  before  the  Parliamentary  committee 
which  studied  the  situation,  because  there  was  no  attempt  to 
palliate  the  practices  of  English  manufacturers  themselves.  A 
vast  number  of  foreign  watches,  the  testimony  showed,  were 
sold  in  England  as  native-made,  the  cases  bearing  the  English 
hallmark.  English  cigar  manufacturers  put  their  names  on 
boxes  or  labels  which  were  stamped  as  of  genuine  Havana  make, 
and  Bremen  cigar  manufacturers  did  likewise.  In  various  other 
lines  of  manufacture  the  same  fraudulent  branding  was  brazenly 
persistent.  But  in  the  great  diversity  of  frauds,  those  in  the 
cutlery  trade  were  an  uppermost  grievance  of  English  manu- 
facturers against  German.  After  having  made  the  name  of 
Sheffield  a  world-wide  trade-mark  for  cutlery,  long-established 
manufacturers  of  that  city  found  themselves,  to  their  great  ire, 
undercut  by  German  commercial  piracy.  The  Cutlers'  Com- 
pany, an  association  of  Sheffield,  formally  and  loudly  remon- 
strated, in  1883,  against  the  making  in  Germany  of  large  quanti- 
ties of  inferior  cutlery  shipped  to  Sheffield  and  there  labeled 
with  the  name  of  some  mythical  concern  as  of  Sheffield  manu- 
facture.17 

By  such  methods,  copied  from  other  countries  and  improved 
by  ingenious  and  disciplined  proficiency,  did  German  indus- 
trialism fast  forge  ahead  and  pile  up  fortunes  for  the  owners. 
At  the  same  time,  the  legend  of  a  different  Germany  was  widely 
spread  by  professorial  writers  of  that  country  and  even  by 
some  English  authors.  Then  and  later  the  world  heard  much 
of  a  romantic  Germany  of  sentiment,  and  a  cultured  Germany 
suffused  with  philosophy,  poetry,  music  and  art.  A  small  truly 
cultured  class  there  was  in  Germany,  as  in  differing  degrees 
there  was  in  every  country.  But  the  strain  dominating  German 
impulse  was  a  combination  of  intense  martial  vaingloriousness, 
and  pride  in  an  unprecedented  industrial  progress.  While 
pedants  were  flaunting  German  culture,  German  manufacturers 
were  flooding  their  country  with  the  most  execrable  "art  wares" 
and  sending  shiploads  of  these  to  other  countries.  In  England 
and  America  particularly  their  cheap  price  won  a  buying  public. 


220  AMERICA  STRIKES  BACK 

Tawdry  bronzes,  stained-glass  windows,  papier-mache  mould- 
ings and  a  conglomeration  of  other  "ornamental"  iniquities  were 
spewed  forth  in  an  appalling  mass. 

In  its  redoubtable  march,  materialism  in  Germany  had 
greatly  shattered  the  stiff,  pompous  caste  exclusiveness  in  which 
the  long-governing  landed  bureaucracy  had  incased  itself.  Of- 
ficialdom now  was  subservient  to  the  interests  of  powerful  in- 
dustrialism. No  longer  did  an  official  career  offer  the  great 
prizes  of  material  success.  Increasingly,  this  was  estimated  by 
possession  of  industrial,  commercial  and  financial  wealth.  The 
rise  of  Socialist  philosophy  and  agitation  somewhat  neutralized 
the  worship  of  industrial  success.  But  it  did  not  seriously  im- 
pair a  widespread  elation  in  Germany  at  the  commercial  and 
industrial  status  which  that  country  was  attaining  in  the  van 
of  nations.  Within  a  decade  or  so  it  sped  to  fourth  rank,  and 
later  challenged  still  more  closely  the  trade  of  pre-eminent 
England  and  America. 

However,  reserving  their  detractions  for  America,  hostile 
British  critics  had  no  mind  to  notice  this  near-by  demonstration 
of  materialism,  portentous  to  Britain  itself.  They  must  needs 
cling  to  the  overworn  convention  of  journeying  to  America.  An 
English  journalist  of  ephemeral  reputation,  George  Augustus 
Sala,  now  joined  the  procession.  He  made  of  the  hospitality 
shown  him  by  sundry  American  hosts  the  invidious  occasion  for 
showering  jibes.  In  his  book,  "America  Revisited,"  he  contrived 
to  do  this  by  acknowledging  the  courtesies  of  "pork-packing 
kings,"  "railway  kings,"  "silver  kings"  and  divers  others.  And 
from  a  second  English  journalist,  G.  W.  Steevens,  came  a  ful- 
mination  against  America.  It  was  a  tissue  of  opinions — the 
repetitions  of  old  scribblings — but  it  was  printed  as  fresh,  con- 
temporary correspondence  in  "The  London  Daily  Mail."  Later 
it  was  issued  in  a  book  with  the  title  "The  Land  of  the  Dollar," 
and  was  published  in  London  and  New  York.  Steevens  con- 
demned Americans  "as  the  most  materialistic  people  in  the 
world."  And  then,  while  seeming  to  mitigate  this  sweeping  as- 
sertion, he  returned  to  the  charge:  Americans,  he  said,  were 
not  materialistic  "in  the  sense  of  being  avaricious,"  but  "be- 
cause they  must  make  something,  and  there  is  nothing  else  to 
make"  except  money.  This  is  a  sample  of  Steevens'  judgment 


"WANT  OF  SOUL  AND  DELICACY"  221 

and  poise:  "No  American  is  fit  to  talk  until  he  is  thirty,  and  he 
retains  all  his  life  a  want  of  discipline,  an  incapacity  for  ordered 
and  corporate  effort.77 

One  of  the  tribe  of  hostile  critics,  however,  overreached  him- 
self by  the  sheer  excess  of  his  acerbity.  If  Rudyard  Kipling 
had  held  himself  down  to  routine  preconceptions,  as  had  many 
another  before  him,  he  might  have  escaped  attack.  But  the 
snarling  provincialism  of  this  youthful  prodigy  proved  too  much 
even  for  the  numerous  American  admirers  of  his  verse  and 
fiction.  Despite  his  unquestionable  talent  for  the  turn  of  a 
phrase,  his  "American  Notes77  were  all  too  plainly  dictated 
by  the  most  hackneyed  of  preconceptions.  He  visited  Chicago, 
and  found  it  "inhabited  by  savages.77  "The  American  of  wealth,77 
said  Kipling,  "is  owned  by  his  family.  They  exploit  him  for 
bullion.  The  women  get  the  ha7pence,  the  kicks  are  all  his  own.77 
Before  the  stranger,  he  wrote  in  his  "Letters  of  Travel,77  Ameri- 
can people  of  the  Eastern  cities  preferred  to  talk  of  their 
mighty  continent,  "and  to  call  aloud  upon  Baal  of  the  Dollars 
— to  catalogue  their  lines,  mines,  telephones,  banks  and  cities, 
and  all  the  other  shells,  buttons  and  counters  that  they  have 
made  gods  over  them.77 

Just  so.  But,  while  British  critics  of  America  were  busying 
themselves  with  the  supposedly  American  phenomenon  of  the 
millionaire  and  multimillionaire  as  significant  of  "Yankee77 
worship  of  money,  hardly  any  attention  was  given  in  Britain  to 
the  fast-increasing  number  of  millionaire  fortunes  there.  In  a 
long  editorial,  on  May  19,  1883,  "The  Spectator,77  of  London, 
discoursed  on  "that  curious  and  little-studied  subject,  the 
History  of  Property.77  It  related  how,  ten  years  previously,  it 
had  published  a  list,  compiled  from  "The  Illustrated  London 
News,77  of  all  British  fortunes  exceeding  £250,000  personalty 
at  death  during  the  decade.  "That  list,  which  was  the  first  of  its 
kind,  and  excited  at  the  time  a  preposterous  amount  of  inter- 
est,77 showed:  Within  the  decade  ten  persons  had  each  left  more 
than  £1,000,000;  fifty-three  more  than  £500,000;  and  a  hun- 
dred and  sixty-one  more  than  £250,000  sterling.  During  the 
next  decade — up  to  1883 — thirteen  men  had  left  more  than 
£1,000,000;  fifty-six  more  than  £500,000;  and  one  hundred  and 
ninety-five  more  than  £250,000.  The  number  of  fortunes  rang- 


222  AMERICA  STRIKES  BACK 

ing  between  £100,000  and  £250,000  had  "increased  enor- 
mously." 

The  account  in  "The  Spectator"  stated  that  these  returns 
were  based  on  the  payments  made  for  probate  duty,  and  did 
not  include  land  or  houses,  or  the  enormous  masses  of  wealth 
invested  abroad.  Although  liable  to  income  tax,  this  wealth  held 
in  other  countries  escaped  legacy  taxes  entirely.  "Much  of  this 
mass  belong  to  the  very  rich,  who  have  accurate  information, 
who  like  a  good  percentage,  and  who  are  in  many  cases  haunted 
by  an  idea  that  distribution  is  equivalent  to  insurance.  The 
English  holdings  in  the  Rentes  [government  bonds]  of  all 
countries,  in  railways  and  banks  abroad  and  in  foreign  house 
property,  elude  this  list  altogether,  as  do  the  immense  sources 
of  wealth  classed  as  'business'  with  their  offices  outside  Great 
Britain."  But  even  these  partial  returns  showed  an  increase  of 
18  per  cent  in  Britain's  multimillionaires  and  millionaires.  Ex- 
cluding the  Rothschild  wealth,  there  was,  however,  no  one  in 
the  list  with  a  fortune  equivalent  to  $10,000,000.  An  annual 
income  of  £80,000  denoted  the  highest  sum  in  the  list.  No  Brit- 
ish fortune  approached  the  dimensions  of  the  Vanderbilt  or  the 
Gould  "mammoth"  fortunes  in  America. 

"What  a  list  it  is!"  commented  "The  Spectator"  on  British 
millionairedom.  "The  immense  majority  were  quiet  traders, 
bankers,  iron  masters  and  the  like.  .  .  .  They  represent  the 
profits  of  Trade.  As  to  popular  hostility  to  millionaires  there  is 
no  trace  of  it.  ...  The  rising  rich  men  in  England  have  purse- 
pride,  but  it  is  toned  down  by  the  social  ascendency  of  an  aris- 
tocracy which  loves  money,  and  despises  moneyed  men.  .  .  . 
Wealth,  when  not  too  pompous,  is  liked  like  any  other  orna- 
ment. .  .  .  Indeed,  even  opinion  hardly  presses  on  the  rich; 
there  is  no  'feeling,'  as  in  America,  that  a  millionaire  should  do 
something  for  the  public.  .  .  .  Englishmen  lament  over  a  fire 
all  the  more,  if  the  person  burnt  out  was  rich." 


CHAPTER   XVII 
SPEAKING  OF  COMPARISONS 

IN  contrast  to  the  long  line  of  caviling  critics,  it  is  refreshing 
to  turn  now  to  an  expositor  who,  before  writing  about  America, 
took  pains  to  acquaint  himself  with  the  subject.  This  distinction 
can  be  deservedly  accorded  to  James  Bryce,  an  English  prac- 
ticing lawyer  and  Regius  Professor  of  Civil  Law  at  Oxford. 
He  had,  in  1870,  begun  the  first  of  a  series  of  visits  to  America, 
improving  each  occasion  by  making  a  serious  and  thorough 
study  of  American  politics  and  government.  The  knowledge 
thus  gained  he  incorporated  in  his  voluminous  book,  "The 
American  Commonwealth,"  published  in  1888  after  five  years 
of  due  preparation.  Since  Tocqueville's,  Bryce's  book  was  the 
first  to  show  real  understanding  and  authentic  grasp.  "The  Amer- 
ican Commonwealth"  was  accorded  wide  approbation  in  Amer- 
ica. In  due  time  it  was  pronounced  a  classic,  and  it  had  an 
exceptional  longevity. 

But  the  paradox  about  Bryce  which  escaped  notice  was 
that,  although  for  one  of  alien  associations  he  had  an  excellent 
understanding  of  American  politics,  he  did  not  seem  to  compre- 
hend the  parallel  implications  and  import  of  the  politics  of  his 
own  country.  He  exposed  himself  to  this  charge  of  incongruity 
and  strongly  invited  criticism  on  this  account,  for,  in  dealing 
with  American  corruption,  he  frequently  drew  comparisons 
with  European  conditions,  particularly  British.  These  com- 
parisons, all  to  the  great  disadvantage  of  American  political 
morality,  were  grievously  one-sided,  in  that  they  failed  to  dis- 
tinguish between  the  workings  of  two  different  kinds  of  corrup- 
tion. The  outright  bribery  often  done  in  America  to  procure 
the  passage  of  laws  granting  public  franchises  and  other  special 
privileges  profoundly  impressed  Bryce.  But  the  underlying 
methods  used  in  Britain  in  achieving  precisely  the  same  results 
were  excluded  from  his  observation. 

223 


224  AMERICA  STRIKES  BACK 

Bryce's  training  had  been  of  the  legalistic  order;  he  saw  gov- 
ernmental activity  as  predicated  by  political  motives ;  he  lacked 
adequate  perception  of  the  powerful  infiltration  of  economic 
aims,  of  which  political  action  was  often  only  the  expression. 
In  setting  forth  the  comparison  with  Europe,  Bryce  made  only 
a  few  offhand  and  general  references  to  corrupt  conditions 
there.  Some  quiet  jobbery  had  been  perpetrated  by  English 
town  councils.  Content  with  that  fleeting  admission,  he  fol- 
lowed this  phase  no  further.  Instead,  he  turned  his  attention 
to  France,  where  he  found  that  a  great  deal  of  jobbery  had  been 
committed  in  Paris  when  Baron  Haussmann  renovated  the 
streets  of  that  city  during  the  reign  of  Napoleon  III. 

He  then  became  vastly  more  definite  regarding  America: 
"No  European  city  has,  however,  witnessed  scandals  approach- 
ing those  of  New  York  or  Philadelphia,  where  the  public  till 
has  been  robbed  on  a  vast  scale,  and  accounts  have  been  sys- 
tematically cooked  to  conceal  the  thefts."  Had  Bryce  been  bet- 
ter grounded  in  historical  knowledge  of  his  own  country  he 
would  not  have  made  so  sweeping  an  assertion,  all-inclusive  in 
its  scope  and  implications.  For,  as  has  been  fully  proved  from 
the  British  records  themselves,  great  thefts  of  public  funds 
were  being  effected  in  England  when  American  municipalities 
were  in  merest  embryo.  The  only  difference — and  it  is  not 
impertinent  to  regard  this  distinction  as  vitally  important — 
was  that  the  robbery  in  England  was  done  by  Government,  and 
not  by  municipal,  officials. 

What  were  the  contemporaneous  conditions  in  Britain  at 
the  time  when  Bryce  wrote  "The  American  Commonwealth"? 
Since,  as  we  have  said,  Bryce  professed  to  make  the  compari- 
son, the  question  is  strictly  in  order.  Anyone  having  insight  into 
the  extent  and  power  of  the  moneyed  interests  personified  in 
the  British  Parliament  would  have  seen  the  need  of  much 
elaboration.  Yet  to  this  more  important  factor  Bryce  devoted 
only  a  single  random  observation.  The  British  Parliament,  as 
he  pictured  it,  was  composed  of  an  Outer  Circle  the  members  of 
which  were  not  primarily  concerned  with  professional  politics 
but  with  their  avocations,  and  an  Inner  Circle  the  majority  of 
which  were  professional  politicians  in  a  sense  only,  because  pol- 
itics was  the  main  although  not  the  sole  business  of  their  lives. 


SPEAKING  OF  COMPARISONS  225 

And  in  these  desultory  sentences  he  compressed  the  pursuits 
of  the  Inner  Circle:  "A  handful  hope  to  get  some  post,  a  some- 
what larger  number  find  that  a  seat  in  Parliament  enables  them 
to  push  their  financial  undertakings,  or  gives  them  at  least  a 
better  standing  in  the  commercial  world.  But  the  making  of  a 
livelihood  does  not  come  into  view  of  the  great  majority  at  all." 
The  only  kind  of  bribery  in  Britain  to  which  Bryce  gave  atten- 
tion was  election  bribery.  English  morality,  he  wrote,  regarded 
(or  until  very  lately  had  regarded)  the  corrupting  of  voters 
as  an  offence  only  when  detection  followed  it.1 

Bryce  need  not  have  gone  to  much  trouble  in  order  to  ascer- 
tain the  real  composition  of  the  British  Parliament.  The  simple 
process  of  consulting  the  English  "Directory  of  Directors" 
would  have  enlightened  him,  had  he  been  so  inclined.  He  would 
have  found  that  the  dominating  forces  in  Parliament  were  the 
members  who  were  directors  in  financial,  industrial  and  other 
corporations.  A  solid  bloc,  twenty-three  members  of  the  House 
of  Lords,  were  directors  of  an  array  of  one  hundred  and  eleven 
corporations.  Apart  from  that  multiplicity  of  directorships, 
eighty-seven  noble  lords  were  corporation  directors.  But  this 
was  not  a  complete  list.  Aside,  too,  from  the  holding  of  cor- 
poration directorships  by  members  of  the  House  of  Commons 
in  general,  a  puissant  group  of  twenty-six  members  alone  held 
directorships  in  two  hundred  and  eighteen  corporations — an 
average  per  individual  of  more  than  eight  directorships.  There 
they  sat,  alert  to  watch  proceedings,  keen  to  detect  any  move 
trenching  upon  their  business  interests,  zealous  in  promoting 
legislation  benefiting  these,  and  vigilant  in  blocking  proposals 
counter  to  the  same.  Estimated  by  formal  appearance,  all  of 
these  members  were  acting  in  the  capacity  of  representatives  of 
their  voting  constituencies,  and  were  untainted  by  venality. 
They  were  garbed  in  a  fine  veneer  of  respectability;  and  no 
one,  upon  pain  of  prosecution,  could  impute  dishonest  motives 
to  them. 

Yet,  in  roundabout  fashion,  there  developed  scandal  after 
scandal  revolving  around  their  self-interested  acts.  One  typical 
instance  was  the  report  of  the  House  of  Commons  Select  Com- 
mittee appointed  to  inquire  into  the  stock-watering  operations 
of  four  English  railway  companies.  The  Select  Committee 


226  AMERICA  STRIKES  BACK 

tacitly  assented  to  the  plea  made  in  defence  of  the  corporations 
that  watered  stock  was  good  for  both  railway  owners  and  in- 
vestors, and  it  definitely  recommended  the  continuance  of 
Parliament's  policy  of  non-intervention  in  the  financial  affairs 
of  railway  companies  2 — a  finding  gleefully  hailed  by  every 
British  stock-jobbing  promoter.  Meanwhile  several  English 
newspapers  were  thundering  against  the  viciousness  of  Ameri- 
can stock-watering,  and  warned  English  investors  against 
marauding  American  stock  jobbers.  But,  with  its  usual  forth- 
rightness,  "The  Economist,"  of  London,  attacked  evils  at  home. 
On  June  28,  and  July  26,  1890,  it  expatiated  upon  the  dual- 
headed  crowd  of  members  of  both  houses  of  Parliament  who 
were  corporation  directors,  and  it  earnestly  moralized  upon  the 
attendant  scandals.  "No  doubt,"  editorialized  this  periodical, 
"the  best  way  of  preventing  the  recurrence  of  the  scandals 
which  have  arisen  in  the  past  in  connection  with  the  question 
we  are  discussing  would  be  for  members  of  Parliament  to  agree, 
by  a  self-denying  ordinance,  either  to  leave  the  direction  of 
public  companies  [private  business  corporations]  to  other  peo- 
ple or  to  resign  their  seats." 

At  this  point  two  facts  stand  out.  As  American  industrial 
"kings"  gradually  bought  their  way  into  seats  in  the  United 
States  Senate,  turning  it  largely  into  "a  rich  man's  club,"  Brit- 
ish publications  pointed  to  this  irruption  as  damning  evidence 
of  the  sway  of  money  in  America.  The  other  fact  was  the  light 
way  in  which  the  British  type  of  legislative  scandal  was  taken 
in  Britain.  American  corruption,  on  the  one  hand,  was  viewed 
there  as  a  great,  affrighting  and  demoralizing  evil.  A  transac- 
tion such  as  the  bribing  of  a  majority  of  the  New  York  City 
Board  of  Aldermen,  in  1884,  with  $500,000  cash  to  grant  the 
Broadway  surface  railway  franchise  to  Jacob  Sharp  and  associ- 
ates, was  treated  in  England  as  downright  criminal  corruption, 
while  the  self-interested  actions  of  many  British  legislators 
were  viewed  at  the  worst  as  an  impropriety. 

Shielded  by  the  subtleties  of  their  system,  British  legislators 
were  not  liable  to  any  penalties  for  their  acts,  nor  did  they  even 
have  to  experience  the  discomfort  of  serious  attack.  Contrari- 
wise, the  cash  corruption  in  America,  both  by  its  nature  and 
its  trail  of  consequences,  produced  shocks  upon  public  opinion. 


SPEAKING  OF  COMPARISONS  227 

Exposure  itself  made  sensation  enough,  but  this  was  supple- 
mented and  prolonged  by  uproar  of  indictments,  arrests,  ex- 
tended trials,  and  by  imprisonment  of  the  convicted.  In  the 
case  of  the  Broadway  franchise  bribery  Sharp  was  sentenced  to 
prison;  he  obtained  a  retrial  but  died  in  the  interim.  A  number 
of  aldermen  were  sentenced,  and  various  other  aldermen  fled  to 
Canada  to  escape  prosecution.3  Once  vested  rights  were  con- 
ferred by  act  of  the  British  Parliament,  though,  there  could  not 
ensue  any  public  demand  for  abrogation;  Parliament's  enact- 
ments were  binding  and  incontestable. 

Governing  functionaries  in  other  European  countries  also 
had  their  corrupt  systems,  but  these  were  surrounded  and  but- 
tressed with  such  wily  indirection  that  it  was  difficult  to  trace 
their  ramifications.  All  that  can  be  itemized  on  this  point  is 
that,  adroit  as  was  the  technique  of  the  traditional  French  sys- 
tem, it  was  not  proof  against  the  outbreak  of  successive  scan- 
dals. Because  of  the  corrupt  traffic  which  his  son-in-law  Wilson 
carried  on  in  bestowing  offices  and  decorations,  Francois  P.  J. 
Grevy,  President  of  the  French  Republic  since  1879,  was  com- 
pelled to  resign  in  1887.  And  in  1888  (the  year  in  which 
Bryce's  book  was  originally  published),  the  French  Parliament 
was  corrupted  wholesale  by  de  Lesseps'  Panama  Canal  Com- 
pany. After  spending  or  squandering  an  amount  equal  to 
nearly  $250,000,000  subscribed  by  the  French  people,  the  com- 
pany had  become  insolvent.  All  along,  as  disclosures  later 
showed,  the  company  had  subsidized  Cabinet  ministers  and 
members  of  Parliament.  Floquet,  president  of  the  Chamber  of 
Deputies,  admitted  that  when  Prime  Minister  he  had  received 
50,000  francs  from  the  company  for  the  purposes  of  his  politi- 
cal party,  and  he  stoutly  justified  the  acceptance  of  the  funds 
as  consistent  with  French  political  custom. 

Unable  to  raise  more  funds  by  the  usual  investment  appeals, 
the  Panama  Company  induced  the  French  Parliament  to  au- 
thorize a  lottery  loan.  Later  came  a  great  commotion  when 
charges  were  made  that  one  hundred  and  fifty  members  of  the 
Chamber  of  Deputies  shared  in  the  distribution  of  5,000,000 
francs  for  the  purchase  of  their  votes  for  the  passage  of  the  act. 
Added  to  direct  corruption,  several  of  the  Deputies  and  Sen- 


228  AMERICA  STRIKES  BACK 

ators  participated  in  the  underwriting  syndicate  floating  the 
loan.  When  this  surreptitious  affiliation  was  disclosed,  they  af- 
fected much  surprise  at  the  denunciations.  They  had,  they  con- 
tended, as  much  right  to  engage  in  this  undertaking  as  in  any 
other  financial  venture,  and  they  upheld  their  course  as  not 
deviating  from  the  code  of  official  morality. 

To  French  newspapers  large — often  munificent — subsidies 
had  been  paid  by  the  Panama  Company  since  its  inception.  En- 
dorsements and  laudations  of  its  promoters  and  enthusiastic  as- 
surances of  its  success  were  spread  in  many  an  editorial  and 
article  which  were  supposed  by  credulous  investors  to  be  dis- 
interested and  authoritative.  For  approving  and  puffing  the 
loan  of  1888,  owners  of  some  Paris  journals  were  paid  sums 
respectively  ranging  from  60,000  to  100,000  francs.  With  the 
exposure  of  these  dealings,  the  owners  assumed  a  bold  attitude, 
holding  that  the  selling  of  publicity  was  their  line  of  business, 
and  that  they  had  a  perfect  right  to  vend  it  at  as  high  a  price  as 
they  could  get. 

Only  twelve  Senators  and  Deputies  were  actually  committed 
for  trial,  but  the  difficulty  of  legally  proving  the  actual  pocket- 
ing of  money  bribes  resulted  in  acquittals.  The  solitary  in- 
stance of  conviction  was  that  of  a  former  Cabinet  Minister,  and 
he  was  regarded  by  the  French  public  as  a  scapegoat.  Mean- 
while, the  French  Parliament  had  ostentatiously  carried  on 
the  motions  of  an  inquiry  into  its  own  conduct.  It  appointed  a 
Deputy  to  summarize  the  evidence  and  draw  conclusions.  His 
report  was  a  grand  flourish  of  extenuation.  Charges  of  bribery 
were  waved  aside  as  pure  fiction  concocted  to  divert  attention 
from  the  mismanagement  of  the  company's  directors,  who  were 
declared  the  culprits  for  wasting  so  great  a  sum  of  French  in- 
vestments. Moreover,  the  bribery  charges  were  indicted  by  the 
report  as  a  campaign  of  monarchist  plotters  to  discredit  re- 
publican institutions.  But,  the  report  triumphantly  proclaimed, 
the  maneuver  did  not  succeed,  and  "the  calumniators  were  con- 
founded." The  complete  failure  of  the  Panama  Company,  the 
causes  thereof,  the  abandonment  of  the  canal  project,  and  the 
subsequent  sale  of  its  rights  to  the  American  Government, — 
these  comprise  another  story. 

Oddly  enough,  at  this  juncture  there  bounded  forth  a  French 


SPEAKING  OF  COMPARISONS  229 

critic  to  discharge  his  volley  against  the  curse  of  American 
mammonism.  Writing  under  the  pseudonym  of  Max  O'Rell, 
Paul  Blouet  enjoyed — and  he  did  enjoy  it — much  literary 
vogue  both  in  America  and  England.  On  English  life  O'Rell 
wrote  books  such  as  "John  Bull  and  His  Island"  and  "Daugh- 
ters of  John  Bull";  and  he  presumed  to  dissect  Americans  in 
a  volume  "Jonathan  and  His  Continent."  The  America  that  he 
presented  in  his  book  was  the  picture  made  tediously  familiar 
by  many  a  prior  writer.  In  America  the  dollar  was  supreme 
and  omnipresent  in  thought  and  action.  Overcome  by  dollar 
valuation,  the  ordinary  American  "looks  upon  every  man  as 
possessing  a  certain  commercial  value";  in  America  "more  than 
anywhere  else  talent  without  money  is  a  useless  tool." 

Presumably  Blouet  had  read  somewhere  that  America  led 
all  nations  in  the  importation  of  diamonds.  So  it  did;  but  Eng- 
land, France  and  Germany  were  also  excellent  customers,  and 
if  relative  populations  and  resources  were  weighed,  they  stood 
high  in  the  rank  of  diamond  buyers.  However,  suiting  the  scope 
of  his  indictment  to  the  geographical  breadth  of  his  subject, 
Blouet  visioned  diamonds  as  worn,  not  to  some  extent,  but 
everywhere  in  America;  "to  the  American  woman  they  are  ob- 
jects of  prime  necessity,  not  of  luxury,"  and  he  unleashed  his 
scorn  upon  the  vulgarity  of  the  display.  In  a  page  or  two  more 
he  veered,  and,  although  he  still  regarded  all  Americans  as 
money  graspers,  he  acquitted  them  of  the  charge  that  they 
adored  it.  "If  the  American  thirsts  for  money,  it  is  not  for  the 
love  of  money,  as  a  rule,  but  for  the  love  of  that  which  money 
can  buy.  In  other  words,  avarice  is  a  vice  wholly  unknown  in 
America.  ...  In  Europe,  there  is  a  false  notion  that  Jonathan 
thinks  only  of  money,  that  he  passes  his  life  in  the  worship  of 
the  almighty  dollar.  It  is  an  error.  He  cares  little  for  money  at 
heart,  but  for  the  things  money  buys."  4 

The  real  America,  patent  to  anyone  who  cared  to  see,  was 
entirely  different  from  the  fable  of  a  population  surfeited  with 
money.  At  the  apex  was  a  plutocracy  never  satisfied  with  its 
already  great  wealth,  and  ceaselessly  craving  more  and  ever 
still  more.  But  nearly  one-half  of  America's  population — 
29,000,000  in  all,  at  that  time — toiled  in  manufactures,  mines, 
trade  and  transportation,  agriculture,  domestic  and  other 


230  AMERICA  STRIKES  BACK 

service.  The  exceptional  working  woman  might  sometimes  be 
presented  with  a  modest  diamond  engagement  ring,  but  what 
luxuries  could  she  herself  buy  on  an  average  weekly  wage  of 
$5.24?  Such,  according  to  the  report  of  the  United  States  Com- 
missioner of  Labor  in  1889,  was  the  prevalent  woman's  wage 
in  the  chief  American  cities.  And  men  working  for  an  average 
daily  wage  of  $1.69,  which  was  the  pay  of  millions  employed 
in  the  manufacturing  industries,5  were  in  no  position  to  think 
of  indulging  in  adornment.  In  point  of  stern  fact,  many  workers 
in  factory  towns  lacked  even  decent  apparel;  they  were  unable 
to  go  to  church  on  Sunday  because  they  had  no  appropriate 
clothes.6 

It  ill  became  critics  like  Blouet  to  sneer  at  diamond-wearing 
America  when  the  French,  German  and  English  capitalists  who 
controlled  the  diamond  mines  were  exerting  themselves  to  find 
ever  wider  markets,  and  were  deriving  high  gratification  and 
opulent  profit  from  America's  increased  imports.  And  the  own- 
ers of  Amsterdam's  cutting  and  polishing  factories,  the  most 
extensive  in  the  world,  were  also  beneficiaries  of  the  expanding 
traffic.  Diamond  finds  in  British,  French  and  other  European 
colonial  possessions  had  long  been  going  on,  but  the  greatest 
impetus  came  with  the  discovery  of  the  Kimberley  diamond 
deposits  in  South  Africa.  There  a  number  of  French  capitalists, 
incorporating  themselves  as  the  "Compagnie  Franchise  des 
Mines  de  Diamont  du  Cap  de  Bon  Esperance,"  early  pre- 
empted a  block  of  claims  running  nearly  across  the  Kimberley 
mines  from  north  to  south.  Headed  by  Cecil  Rhodes  and  other 
British  capitalists,  the  DeBeers  Mining  Company  was  or- 
ganized in  1880,  and  within  the  next  ten  years  had  absorbed  a 
group  of  adjacent  companies.  These  included  the  French  com- 
pany, for  the  holdings  of  which  £1,400,000  was  paid.7  To  keep 
up  the  price  of  diamonds  by  regulation  of  output,  the  DeBeers 
Company  restricted  annual  diamond  exports  to  between  four 
and  four-and-a-half  million  carats. 

In  South  Africa  there  was  an  intense  scramble  for  wealth — 
a  passion  reflected  in  the  stock  markets  of  London  and  other 
European  capitals.  But  although  the  South  African  situation 
was  news,  and  was  novel  in  several  respects,  no  European 


SPEAKING  OF  COMPARISONS  231 

critics  journeyed  there  to  write  accounts  of  the  rampant  money 
spirit.  Profits  from  diamond  mines  were  so  large,  and  so  daz- 
zling were  the  future  prospects,  that  both  in  South  Africa  and 
Europe  there  followed  crazes  of  speculation  in  diamond  mine 
shares. 

In  the  early  1880's,  before  consolidation  had  been  effected, 
there  sprang  up  a  host  of  diamond  mining  companies,  some 
with  good,  others  with  dubious  claims,  and  nearly  all  lacking 
adequate  capital.  "But,"  wrote  a  resident  mining  engineer  on 
local  conditions,  "a  speculative  mania  had  taken  possession  of 
the  public,  and  mining  script  was  regarded  as  a  sure  passport 
to  wealth.  .  .  .  Within  the  space  of  a  few  months,  the  promise 
of  certain  fortunes  to  investors  was  held  out  by  more  than  a 
hundred  diamond  mining  companies,  and  it  rarely  happened 
that  any  of  these  failed  to  be  floated,  or  their  shares  to  be 
rushed  up  to  a  big  premium.  The  eagerness  to  be  'in  the  swim* 
silenced  every  prompting  of  prudence;  clerks  threw  up  their 
situations,  merchants  left  their  stores,  and  professional  men 
their  duties,  to  hang  about  street  corners  and  dabble  in  stocks, 
of  the  real  value  of  which  they  were  profoundly  ignorant.  .  .  . 
So  great  was  the  demand  for  fresh  stocks  that  claims  which 
were  known  never  to  have  paid  for  working  were  floated  almost 
as  easily  as  the  richest  proved  properties."  8 

The  bursting  of  this  bubble  was  no  lesson;  later  came  other 
wild  excesses.  Great  was  the  popular  confidence  in  anything 
projected  as  a  diamond  mine  venture.  But  in  the  operations  of 
substantial  diamond  mine  companies  there  were  stupendous 
profits,  which  convinced  an  investing  and  speculating  public 
that  it  could  not  fail  in  its  money-making  aims.  Take  for  in- 
stance the  DeBeers  Mining  Company.  In  the  span  of  eight 
years  it  had  progressively  increased  its  capital  from  £200,000 
to  £2,332,170,  on  which  it  had  paid  more  than  £1,000,000  in 
dividends.  These  were  equal  to  a  shade  less  than  72  per  cent  on 
the  sums  at  which  the  capital  had  successively  stood.  Moreover, 
stockholders  were  further  elated  by  a  distribution  of  41  per  cent 
in  bonus  stock.9  For  the  period  from  the  discovery  of  the  South 
African  diamond  mines,  in  1867,  to  the  end  of  1892,  the  value 
of  the  diamond  export  was  estimated  at  £70,000,000.  Britain 


232  AMERICA  STRIKES  BACK 

now  possessed  its  cluster  of  "diamond  mine  magnates,"  to  en- 
hance its  wealth  and  to  radiate  luster  as  "empire  builders." 
But  transports  of  enthusiasm  were  not  tempered  by  a  sign  of 
concern,  or  even  thought,  for  the  native  negro  mine  laborers. 
The  exploitation  of  these  was  so  destructive  that  the  death 
rate  regularly,  year  after  year,  was  excessive — fifty-seven  or 
thereabouts  in  every  thousand.  Profits  held  sole  and  charmed 
attention.  Repeatedly  speculative  activity  in  diamond  mine 
shares  on  the  London  Stock  Exchange  was  rampant;  prices  ad- 
vanced "by  leaps  and  bounds."  And  it  was  the  support  of 
English,  French  and  German  capitalists  that  upheld  the  force 
of  this  speculation.10 

Simultaneously  an  "intoxicating  gold  mania"  swept  the  Brit- 
ish speculating  and  investing  public.  It  was  in  1886  that  many 
an  eye  opened  wide  when  "The  Times,"  of  London,  published 
an  authentic  account  of  the  discovery  of  the  great  Rand  gold 
mines  in  the  Transvaal.  The  glorious  reality  of  another  pro- 
digious source  of  wealth  caused  paroxysms  of  excitement. 
Hastening  to  take  advantage  of  this  condition,  promoters 
rushed  forward.  Scores  of  South  African  mining  companies 
were  organized,  stock  was  issued  torrentially,  and  every  device 
of  manipulation  was  deftly  engineered.  Such  was  the  "vast 
throng  of  speculators"  that  the  London  Stock  Exchange  estab- 
lished a  section  dubbed  the  "Kaffir  Circus"  for  dealing  in  South 
African  mining  stock.  Stock  of  some  companies  was  propelled 
to  a  hundred  times  the  original  issue  price,  while  stock  of  other 
companies  which  had  not  done  a  stroke  of  mining  work  was 
pushed  to  twenty  and  thirty  times  its  nominal  value.  In  both 
England  and  South  Africa  crowds  were  drunk  with  dreams  of 
wealth. 

The  dreams  of  the  many  were  ruined  by  the  collapse  of 
prices.  But  recurrently  there  came  on  new  aspirants  to  fortune, 
although  in  much  diminished  numbers.  These  could  not  be  dis- 
suaded from  the  hope  that,  with  such  vast  gold  wealth  in  South 
Africa,  they  would  somehow  be  blessed  with  luck.  And  they 
were  continually  deluded  by  "the  rascality  which  has  been  con- 
nected with  many  of  the  mines" — rascality  thus  defined:  "Wire 
pullers  on  the  spot  treat  the  mines  which  they  are  supposed  to 
manage  as  so  many  gambling  vehicles.  Capitals  have  been  in- 


SPEAKING  OF  COMPARISONS  233 

creased  over  and  over  again,  amalgamation  has  been  forced 
on,  and  all  sorts  of  dodges  resorted  to  in  order  that  a  few  gam- 
blers might  secure  large  profits."  1X 

Phantom  or  flimsy  companies  faded  away,  but  the  solid  gold 
mining  corporations  having  rich  claims  and  adequate  funds  and 
equipment  reaped  incredibly  large  profits.  "Cabbage  patch'7  lo- 
cations, bought  for  trifling  sums  by  English  capitalists  well  in- 
formed of  the  riches  underneath,  were  made  the  basis  for  the 
organization  of  mining  companies  which  extracted  an  immen- 
sity of  gold.  After  1888,  the  first  year  in  which  Rand  gold  min- 
ing became  of  notable  proportions,  the  output  rose  enormously. 
A  group  of  grandiose  "gold  mine  magnates"  made  their  entry 
into  British  finance,  society  and  politics.  How  often  and  caus- 
tically British  critics  expressed  themselves  about  pioneer  crud- 
ities in  America,  we  have  amply  seen.  South  Africa  was  now 
undergoing  its  pioneer  stage,  with  its  crudities,  raw  environ- 
ment, ugly  towns,  itinerancy,  noisy  land  booms  and  wild  wealth 
seeking.  But  in  these  manifestations  no  British  or  other  Euro- 
pean critic  saw  anything  calling  for  adverse  comment.  The  most 
favorable  accounts  of  South  African  development  were  spread 
in  England.  On  the  London  Stock  Exchange,  stock  of  South 
African  land  companies  was  a  prime  feature.  And  in  publica- 
tions South  Africa  was  recommended  as  a  place  pre-eminently 
inviting  to  money-makers.  A  typical  paean  this:  "Above  all, 
for  capitalists,  both  large  and  small,  there  are  opportunities  for 
profitable  investment  such  as  probably  no  other  country  can 
offer."  12 

The  great  influx,  mostly  of  British  subjects,  into  the  gold 
districts  in  the  Transvaal  brought  on  a  war  in  1899  with  the 
Dutch  Boers,  who  had  governmental  control  over  the  region.  A 
description  of  that  war  is  not  pertinent  to  this  narrative;  but 
a  comparison  between  a  share  of  public  opinion  in  Britain 
toward  an  American  war  a  year  previously,  and  the  full  British 
opinion  toward  the  Boer  War,  is  here  competent.  When,  in 
1898,  America  warred  with  Spain,  various  British  newspapers 
and  periodicals  denounced  America's  aims.  "The  Speaker"  con- 
demned the  American  "lust  for  empire."  "The  Saturday  Re- 
view" sneeringly  dealt  with  "the  oil  and  corn  and  the  iron  and 
pigs"  of  America,  contrasting  these  with  the  poetry,  art  and 


234  AMERICA  STRIKES  BACK 

fiction  of  Spain;  and  it  told  how  Englishmen  "are  all  disgusted 
with  these  raw,  vulgar,  blatant  Americans  who  scour  Europe 
in  search  of  their  self  respect  and  cannot  conduct  a  mere  legal 
case  with  decency."  The  Edinburgh  "News"  declared  that  "the 
Yankee  is  thirsting  for  blood."  And  so  on  through  an  assaulting 
list.  Toward  Britain's  own  war,  however,  the  general  British 
position  was  that  of  righteous  self -justification,  and  one  victory 
in  particular  was  celebrated  in  London  by  an  outburst  of  hooli- 
ganism the  like  of  which  has  seldom  been  witnessed  in  any  other 
city  of  modern  times. 

The  Transvaal  was  annexed  to  the  British  dominions,  and 
with  the  compliance  of  the  British  Government  the  gold  mine 
owners  now  had  full  license  to  run  affairs  to  suit  their  interests. 
Accounts  of  hellish  conditions  in  the  mines  reached  members 
of  the  Labor  group  in  Parliament — a  group  not  yet  large  but 
pertinacious  and  militant.  Severely  pointed  questions  were  put 
in  1903  to  Cabinet  ministers.  The  subject  could  not  be  parried, 
and  Viscount  Milner,  Governor  of  the  Transvaal,  was  ordered 
by  the  Government  to  submit  information. 

A  series  of  exploitation  horrors  was  disclosed  by  the  reports 
of  native  inspectors,  magistrates  and  chiefs.  In  America  many 
and  bitter  were  the  contests  between  mine  operators,  notably 
in  the  coal  regions,  over  wages,  hours  and  other  issues.  But  vi- 
ciously bad  as  were  conditions  in  many  American  mines,  they 
did  not  begin  to  equal  abominations  in  the  Transvaal  Rand 
gold  mines.  The  bulk  of  mine  labor  there  was  recruited  from 
primitive  African  tribes.  Agents  of  the  mine  owners  scoured 
Africa,  and  by  promises  of  good  wages  and  treatment  induced 
hordes  to  leave  their  villages  for  mine  labor.  In  the  Transvaal 
mines  there  were  employed  nearly  75,000  negro  natives,  of 
whom  56,000  had  been  decoyed  from  Portuguese  territory  in 
Africa,  and  the  remainder  from  Basutoland,  British  Central 
Africa,  Bechuanaland  and  other  regions.  "The  laborers  pro- 
ceeding to  Johannesburg  are  packed  like  grain  or  coal  bags  in 
trucks.  They  are  not  regarded  as  human  beings  as  Europeans 
are.  No  shelter  of  any  kind  on  the  line  to  Johannesburg  is  pro- 
vided for  them."  13 

Dumped  in  an  exhausted  state  at  the  mines,  the  laborers 
found  themselves  under  the  tyranny  of  overseers.  Some  of  these 


SPEAKING  OF  COMPARISONS  235 

were  brutal  Europeans;  others  were  Zulus,  from  the  fiercest 
and  most  bloodthirsty  tribe  in  South  Africa.  To  "hustle  them 
and  quicken  their  movements"  negro  mine  workers  were  lashed 
with  cowhide  whips.  In  some  mines  they  were,  for  the  slightest 
infractions,  put  in  subterranean  cells.  They  were  forced  to  work 
on  Sunday  as  on  other  days,  and  their  pitiful  wages  were 
drained  for  the  companies'  profit  in  compelling  them  to  buy 
necessaries  at  company  stores.  The  havoc  among  underground 
workers  was  ghastly;  the  mortality  rates  ranged  between  fifty 
and  a  hundred  per  thousand,  with  an  average  of  more  than 
seventy.  The  miners'  abodes  resembled  a  huge  charnel-house; 
and,  with  the  realization  borne  in  upon  him  that  it  was  this 
slaughter  which  was  causing  agitation  in  England,  Lord  Milner 
reported:  "The  high  mortality  rate  is  the  weakest  point  in  our 
armor."  He  sought  to  explain  the  death  rate  as  "primarily  due 
to  the  impoverished  condition  in  which  the  natives  generally 
arrive  from  their  homes  at  the  mines,  and  to  the  sudden  change 
from  semi-tropical  regions  to  the  comparatively  cold  climate 
and  different  altitude  of  the  Witwaterstrand."  14  Under  Boer 
rule  flogging  of  the  native  workers  had  been  common,  but  the 
evils  under  British  rule  were  so  much  greater  that  native  la- 
borers sighed  for  the  return  of  Boer  government.15 

Chinese  coolie  labor,  the  Rand  gold  mine  owners  had  urged 
meanwhile,  was  what  was  most  needed,  and  with  it  the  mines 
would  run  peaceably.  From  a  responsive  Government  in  Lon- 
don they  obtained  consent;  for  their  benefit  a  treaty  was 
quickly  made  with  China,  and  cargoes  of  Chinese  laborers  were 
placed  at  their  disposal.16  Next,  the  mine  owners  demanded  the 
removal  of  the  assessment  placed  upon  the  Transvaal  on  ac- 
count of  the  Boer  War.  It  was,  they  complained,  an  "overshad- 
owing incubus"  upon  that  country's  progress — meaning  a  drag 
upon  their  profits  in  which,  as  stockholders,  many  of  England's 
notabilities  were  concerned.  "South  African  financiers,"  com- 
mented "The  Economist"  (May  28,  1904),  "have  been  so  ten- 
derly treated  by  the  present  Government  that  they  apparently 
imagine  there  is  no  limit  to  the  benefits  that  may  be  showered 
upon  them."  And  there  was  no  limit;  the  Government  soon  an- 
nounced its  decision  to  abandon  all  claims  to  a  war  contribution 
from  the  Transvaal. 


236  AMERICA  STRIKES  BACK 

The  death  rate  among  workers  kept  mounting.  Chinese 
coolies  had  not  proved  a  successful  speculation  after  all;  and 
the  recruiting  of  natives  from  African  tropical  regions  went  on 
constantly.  Among  the  swarms  of  negroes  brought  to  the  mines 
from  these  torrid  areas  the  death  rate  was  enormous,  running 
monthly  in  1913,  for  instance,  from  one  hundred  and  fifteen 
upwards  per  thousand.  These  fatalities  were  denounced  by  the 
Minister  of  Native  Affairs  in  the  Union  Parliament  of  South 
Africa  as  "little  less  than  murder."  Evidence  before  the  South 
African  Commission  showed  that  the  annual  death  rate  among 
certain  classes  of  mine  workers  even  approximated  the  extraor- 
dinary devastation  of  three  hundred  per  thousand.  Two-thirds 
of  the  native  mine  workers  afflicted  with  phthisis  died  on  the 
Rand,  and  those  recovering  had  to  travel  such  long  distances 
that  few  reached  their  kraals.  In  recounting  these  gruesome 
facts,  several  members  of  the  British  Parliament  sought  to  have 
a  Committee  of  Inquiry  investigate,  but  Secretary  of  State  Har- 
court  would  not  accept  the  proposal.17 

With  these  essential  glimpses  into  affairs  in  a  distant  con- 
tinent, we  now  go  back  to  scanning  Europe,  particularly 
France.  Anyone  who  had  a  tolerable  acquaintance  with  life  in 
Paris,  the  vaunted  city  of  pure  devotion  to  culture  and  the  arts, 
was  well  aware  that  money  was  as  much  a  lodestar  there  as 
anywhere  else.  In  American  cities  newspapers  of  popular  cir- 
culation throve  on  exploiting  antics  and  scandals  among  the  rich 
fashionables.  To  such  prying,  invasive  publicity  the  wealthy  in 
France  were  not  exposed.  But  at  times  a  scandal,  by  reason  of 
its  criminality  and  political  connotations,  broke  through  this 
reserve,  and  notoriously  exemplified  the  power  of  money  in 
drawing  to  its  fold  men  reputed  the  most  illustrious  in  France. 

Such  an  edifying  episode  ensued  in  Paris,  in  1892,  in  the 
sensational  "Humbert  Affair.'7  America  had  its  demonstrations 
of  cold-blooded  financial  swindling,  but  its  politics  never  saw 
anything  remotely  approaching  this  audacious  and  vulgar  ex- 
hibition in  the  realms  of  finance  and  politics.  Madame  Humbert 
was  the  wife  of  a  former  Deputy  whose  father,  Gustave  Hum- 
bert, was  Minister  of  Justice  in  1882.  She  invented  a  claim  that 
she  and  her  family  had  inherited  an  English  estate  of  several 


SPEAKING  OF  COMPARISONS  237 

million  pounds.  For  years,  by  sheer  arts  of  persuasion,  she  suc- 
ceeded in  maintaining  the  imposture  and  in  convincing  even 
some  of  the  most  hard-headed  bankers  of  the  truth  of  her  story. 
On  this  they  loaned  her  huge  sums  which  she  used  in  sustaining 
a  luxurious  establishment,  including  a  political  salon.  The  at- 
mosphere of  riches  and  the  blandishments  provided  were  irre- 
sistible attractions  for  an  assemblage  of  the  most  noted  French 
politicians,  who  vied  in  basking  in  her  gracious  and  golden 
favor.  She  had  almost  succeeded  in  marrying  her  daughter  as 
a  great  heiress  to  a  leading  French  politician  when  the  thunder- 
bolt of  exposure  came.  A  succulent  topic  this  scandal  made  in 
Paris,  and  the  flight  of  the  Humberts  and  their  arrest  in  Spain 
intensified  the  excitement  and  distraction  in  French  politics. 

And  now,  passing  to  the  question  of  national  wealth,  we 
encounter  facts  jauntily  overlooked  by  America's  critics.  Rep- 
resenting all  kinds  of  wealth,  the  estimated  figures  were:  Amer- 
ica, eighty-one  billion  dollars;  France,  forty-eight  billion  dol- 
lars. In  proportion  to  size  and  population,  France's  national 
wealth  was  manifestly  greater.  And  the  world's  supply  of 
money  was  widely  distributed;  in  1890  the  world's  banking  re- 
sources were  computed  at  nearly  sixteen  billion  dollars,  of 
which  America  had  less  than  a  third.  Although,  in  the  fifteen 
years  following,  American  banking  resources  increased  in 
greater  degree,  European  banks  in  1905  still  had  the  lead  by 
nearly  four  billion  dollars. 

Once  again,  however,  in  a  book  brought  out  by  a  prominent 
New  York  publishing  house,  one  of  the  French  critics  depicted 
the  entire  American  people  as  swept  madly  into  the  current  of 
one  common  pursuit:  "There  is  no  diversity  of  striving;  all  are 
striving  for  money,  money,  money.  Money  here  is  tyrant,  as  it 
is  tyrant  nowhere  else."  He  did  not  specify  the  countries  in 
which  money  lacked  power  of  command;  instead,  he  went  on: 
"Men  will  do  for  money  here  what  men  will  do  nowhere  else." 
Precisely  what  was  the  differentiation  he  did  not  tell  or  even 
hint.  This  critic  then  went  to  the  ludicrous  extreme  of  lumping 
all  Americans  into  one  indivisible  grouping:  "Here  all  men 
are  in  the  one  colossal  class  of  the  money  makers."  18 

Not  unconscious  that  he  was  depending  upon  mere  "impres- 
sions," another  French  critic  dexterously  turned  them  into  a 


238  AMERICA  STRIKES  BACK 

tenuous  volume  of  425  pages.  Throughout  these  emerged  the 
pain  of  a  fastidious  soul  exceedingly  shocked  by  America's  bar- 
barities. America,  as  Paul  Bourget  saw  it,  was  a  country  of 
incoherence  and  haste;  its  big  town  streets  were  crude;  its  fash- 
ionable life  went  to  excess;  its  culture  had  an  artificial  tension; 
its  business  men  were  ferocious;  its  politicians  and  office  hold- 
ers corrupt;  and  in  its  pleasures  there  was  an  absence  of  re- 
laxation and  abandonment.  And  so  went  on  the  list  of  egregious 
deficiencies,  some  of  the  charges  containing  elements  of  truth 
yet  ringing  false  by  the  way  in  which  they  were  put.  Was  there 
in  his  view  no  worthy  thing  in  America?  He  did  note  one  fea- 
ture, long  before  pointed  out,  but  which  he  dwelt  upon  as 
though  it  were  his  fresh  and  acute  observation.  " Great  men" 
(he  meant  rich  men)  acknowledged  their  civic  duty  by  be- 
queathing large  sums  to  public  benefactions;  when  a  man  of 
wealth  died  "without  having  taken  steps  of  this  kind  universal 
blame  overshadows  his  memory."  19 

As  Bryce  had  properly  remarked  a  few  years  earlier,  the 
fault  of  which  Americans  were  most  frequently  accused  was 
worship  of  wealth.  But  he  had  had  the  fairness  to  draw  a  par- 
allel with  conditions  in  Europe.  "It  may  seem  a  paradox,"  he 
set  forth,  "to  observe  that  a  millionaire  has  a  better  and  easier 
social  career  open  to  him  in  England  than  in  America.  Never- 
theless, there  is  a  sense  in  which  this  is  true.  In  America,  if  his 
private  character  be  bad,  if  he  be  mean,  or  openly  immoral,  or 
personally  vulgar,  or  dishonest,  the  best  society  will  keep  its 
doors  closed  against  him."  Parenthetically,  one  assertion  here, 
that  regarding  dishonesty,  may  be  questioned  as  overdrawn; 
business  and  financial  dishonesty  in  America,  so  long  as  it  did 
not  entail  excessive  scandal,  conviction  and  prison  sentence, 
was  no  bar  to  the  millionaire's  social  access,  did  he  seek  it — 
which  the  pioneer  millionaire  usually  did  not.  "In  England," 
Bryce  went  on,  "great  wealth,  skilfully  employed,  will  more 
readily  force  these  doors  to  open.  For  in  England  great  wealth 
can,  by  using  the  appropriate  methods,  practically  buy  rank 
from  those  who  bestow  it;  or  by  obliging  persons  whose  posi- 
tion enables  them  to  command  fashionable  society,  can  induce 
them  to  stand  sponsors  for  the  upstart,  and  force  him  into  so- 
ciety, a  thing  which  no  person  in  America  has  the  power  of 


SPEAKING  OF  COMPARISONS  239 

doing."  The  rich  man  in  England  might  be  distrusted  and  dis- 
liked by  the  elite  of  the  commercial  world,  he  might  be  vulgar 
and  uneducated,  and  have  nothing  to  recommend  him  except 
his  wealth  and  willingness  to  spend  it  in  providing  amusement 
for  fashionable  people.  "All  this  will  not  prevent  him  from  be- 
coming a  baronet,  or  possibly  a  peer,  and  thereby  acquiring  a 
position  of  assured  dignity  which  he  can  transmit  to  his  off- 
spring." Bryce  declared  that  less  snobbishness  was  shown 
toward  the  rich  in  America  than  in  England.  Except  in  a  few 
places  in  America,  he  noted,  the  very  rich  did  not  make  so 
ostentatious  display  of  wealth  as  did  the  rich  of  England  or 
France.20 

The  difference  between  the  original  rich  in  America  and  in 
England  was  thus  editorially  explained  by  "The  Economist," 
of  London,  on  February  16,  1889:  "We  have  very  rich  men 
among  us,  the  field  of  speculators  is  quite  as  large  as  in  Amer- 
ica, or,  if  we  include  the  Continent,  is  larger.  .  .  .  The  eager- 
ness to  make  money  is  just  as  great.  .  .  .  The  American  who 
has  made  a  great  fortune  in  business  finds  nothing  else  so  in- 
teresting, and  goes  on  accumulating,  just  as  a  whist  player  goes 
on  playing,  because  it  amuses  and  distracts  him.  .  .  .  The 
English  millionaire,  when  his  fortune  has  become  large  and 
solid,  turns  to  other  things — takes  to  collecting,  buys  estates, 
founds  a  family,  or  interests  himself  in  the  much  larger  game 
of  politics.  .  .  .  Great  speculation  involves  great  risks,  and 
the  Englishman  never  quite  regards  his  fortune,  as  the  Amer- 
ican appears  to  do,  as  a  mere  instrument  and  weapon  with 
which  he  plays  his  part  in  life,  but  rather  as  part  of  himself, 
the  loss  of  which  would  destroy  his  self-respect  and  energy.  We 
often  hear  in  this  country  of  men  who  have  lost  three  fortunes 
which  they  have  successively  inherited,  but  the  men  who  have 
made  and  lost  three  are  rare.  In  America  they  are  count- 
less. ,  ." 


CHAPTER  XVIII 
"THE  BITCH-GODDESS  SUCCESS" 

As  the  years  passed,  an  increasing  number  of  America's  critics 
were  novelists.  Many  a  European  purveyor  of  fiction,  on  the 
strength  of  repute  acquired  in  a  totally  different  field  of  writ- 
ing, now  turned  reporter  for  the  duration  of  his  American  visit. 
It  was  perhaps  natural  enough  that  this  should  be  so.  The  busi- 
ness of  novelists,  as  they  often  assert,  is  to  create  a  self- 
sustaining  world  of  fancy  out  of  the  aspects  of  real  life — in 
other  words,  to  turn  fact  into  legend.  But,  as  we  have  seen  and 
shall  see  again,  the  Land  of  the  Dollar  was  a  legend  already  well 
established  in  the  mind  of  the  European  observer.  What,  then, 
could  be  more  pleasant  than  to  visit  a  dream  world  and  report 
the  facts  to  be  seen  there — at  so  much  per  word?  What  better 
recreation  could  a  novelist  desire? 

Among  the  more  querulous  of  these  transients  was  Henry 
James,  an  English  novelist  of  American  birth  and  antecedents. 
Most  of  his  boyhood  had  been  spent  in  England  and  on  the 
Continent,  where  he  was  educated  by  private  tutors.  In  1860 
he  returned  to  America  and  studied  law  at  Harvard.  However, 
he  remained  European  in  view,  cultivated  an  aloof  attitude 
toward  his  native  land,  and  resumed  European  residence  in 
1869,  living  thereafter  in  London  or  in  a  rural  English  retreat. 
After  nearly  a  quarter  of  a  century  thus  spent  he  revisited 
America,  and  recorded  his  impressions  in  a  book,  "The  Ameri- 
can Scene." 

Characteristically,  Henry  James'  analysis  of  American  life 
abounded  in  fine-drawn  aesthetic  distinctions.  It  was  couched 
in  the  involved  style  habitual  with  him,  since,  even  in  his  proper 
field,  he  was  a  coterie-writer.  His  tangible  statements  were  in- 
frequent, but  a  few  did  emerge  here  and  there.  He  was  af- 
frighted by  the  "Trusts  and  the  weight  of  the  new  remorseless 
monopolies  that  operate  as  no  madnesses  of  ancient  personal 

240 


"THE  BITCH-GODDESS  SUCCESS"  241 

power  .  .  .  ever  operated.  .  .  ."  He  was  repelled  by  "the 
liuge  American  rattle  of  gold,"  the  "endless  backing  of  money" 
that  conferred  sacrosanct  privilege  upon  wealth-owners.  Un- 
easy in  America,  Henry  James  returned  to  England  once  more. 
In  1915  he  became  a  naturalized  British  subject;  and  not  long 
afterward  he  was  decorated  by  King  George  with  the  Order  of 
Merit. 

Henry  James'  brother,  Professor  William  James,  had  also 
been  educated  in  Europe.  Both  men,  as  Henry  wrote  with  a 
strong  tincture  of  pride  in  one  of  his  autobiographical  volumes, 
had  acquired  an  attitude  of  detachment  toward  America.  But 
William  James  released  himself  from  this  genteel  tradition  and 
attached  himself  to  America;  or,  as  a  recent  commentator  ex- 
presses it,  he  "found"  America.1  He  became  a  convert — albeit 
a  "metaphysical"  one,  whatever  that  term  may  convey — to  the 
doctrine  of  democracy.  But  on  one  occasion  this  deservedly 
famous  philosopher  descended  to  that  type  of  error  which 
makes  a  partial  statement  seem  a  whole  truth.  He  scored  as  dis- 
tinctively American  "the  squalid  cash  interpretation  put  on  the 
word  success" — "the  moral  flabbiness  born  of  the  exclusive 
worship  of  the  bitch-goddess  success."  That  last  is  a  telling 
phrase.  On  the  evidence,  however,  one  must  submit  that  it  de- 
serves a  wider  application  than  William  James  intended  for  it. 

And  now  for  the  first  time,  in  1906,  came  H.  G.  Wells,  whose 
scientific  romances  had  proved  him  the  possessor  of  a  bold  im- 
agination. In  writing  about  America,  though,  he  stressed  the 
point  that  his  book  embodied  "a  search  after  the  realities."  As 
put  forth  by  Wells,  these  so-called  realities  turned  out  to  be 
merely  the  projection  of  hackneyed  prejudices.  For  example,  he 
laid  down  this  dictum:  "In  no  other  country  and  in  no  other 
age  could  they  [the  men  of  wealth]  have  risen  to  such  emi- 
nence." In  the  way  this  was  put  it  was,  of  course,  sheer  non- 
sense; Wells  should  have  consulted  history  sooner  than  he  did. 
Evidently  unfamiliar  with  the  fact  that  only  a  small  section  of 
America  had  been  settled  by  Puritans,  Wells  went  on  gravely: 
"America  is  still  by  virtue  of  its  great  Puritan  tradition  and  in 
the  older  sense  of  the  word  an  intensely  moral  land.  Most  lusts 
are  strongly  curbed  by  public  opinion,  by  training  and  tradi- 
tion. But  the  lust  of  acquisition  has  not  been  curbed  but  glori- 


242  AMERICA  STRIKES  BACK 

fied.  .  .  .  They  [the  Americans]  have  no  doubt  carried  sharp- 
ness to  the  very  edge  of  dishonesty  but  what  else  was  to  be 
expected  from  American  conditions?  Only  by  doing  so  and  taking 
risks  is  pre-eminent  success  in  getting  to  be  attained."  2 

A  variation  on  this  theme  was  supplied  by  the  English  novel- 
ist Arnold  Bennett,  described  by  an  editorial  interviewer  as  a 
"brilliant  one-man  literary  machine."  Presumably,  he  had  been 
solicited  for  a  book  on  America,  and  post-haste  he  did  it — 192 
pages,  at  the  end  of  which  came  this  burst  of  honest  confession: 
"On  the  subject  of  America,  I  do  not  even  know  enough  to  be 
fully  aware  of  my  own  ignorance.  Still  I  am  fully  sensible  of 
the  enormous  imperfection  and  rashness  of  this  book.  When  I 
regard  the  map  and  see  the  trifling  extent  of  the  ground  that  I 
covered — a  scrap  tucked  away  in  the  northeast  corner  of  the 
vast  multi-colored  territory — I  marvel  at  the  assurance  I  dis- 
played in  choosing  my  title.  Indeed,  I  have  yet  to  see  your 
United  States."  3  If  Bennett  had  any  prankish  disposition  he 
must  have  chuckled  over  the  hoax  that  he  had  perpetrated, 
when,  candidly  facing  his  own  hot  pursuit  of  money  and  know- 
ing that  of  other  English  fiction  writers,  he  gave  the  wonted 
theme  of  American  business  men  a  new  cast  in  his  book.  Sup- 
pose those  business  men  did  love  money?  Did  not  many  money- 
seeking  writers  love  it  too?  So  Bennett  cogitated.  He  himself 
later  told  in  "The  Journal  of  Arnold  Bennett"  that  he  turned 
from  editorial  work  to  fiction  expressly  for  greater  pecuniary  re- 
turns. And  he  made  money  fast  from  his  writings — $80,000  in 
the  year  1912  alone.  He  drove  a  keen  bargain  with  American 
editors,  demanding  two  shillings  a  word  for  his  articles.  At  his 
death  in  1931  his  estate  of  $500,000  ranked  as  one  of  the 
largest  literary  fortunes  in  English  history;  Charles  Dickens 
had  left  $400,000,  and  Anthony  Trollope  $350,000. 

To  critics  like  Henry  James  the  simple  thought  of  scrutiniz- 
ing conditions  other  than  American  never  proposed  itself.  If, 
living  as  he  did  in  an  abstract  atmosphere,  Henry  James  was 
unaware  of  great  business  combinations  in  Britain  and  in  con- 
tinental Europe,  the  fact  of  those  combinations  was  neverthe- 
less patent.  The  divergence  between  American  and  European 
combinations  was  but  one  of  names  used,  magnitude  of  capital, 
and  public  status. 


"THE  BITCH-GODDESS  SUCCESS"  243 

In  America  there  had  been  formed  an  agglomeration  of  more 
than  four  hundred  and  forty  large  industrial,  franchise  and 
transportation  consolidations  with  a  total  capital  exceeding 
$20,000,000,000.  Much  of  the  avalanche  of  stock  issued  was 
goodwill  or  watered  stock,  usually  based  upon  monopolistic 
anticipation  of  earning  power  from  the  ability  to  control  pro- 
duction and  prices.4  These  massive  amalgamations  were  called 
Trusts  in  America,  and  as  fast  as  they  arose  they  incited  bitter 
public  opposition.  As  economic  evolutions  of  gigantic  power, 
the  Trusts  developed  capital  to  an  unprecedented  degree,  and 
it  was  because  of  this  great  concentration  of  wealth,  not  to 
mention  their  threat  to  the  liberty  of  individual  enterprise,  that 
public  sentiment  was  strongly  antagonistic.  The  Trusts  were  re- 
peatedly subjected  to  investigations  by  legislative  committees 
and  to  the  enactment  of  drastic  laws.  The  Sherman  anti-Trust 
act  passed  by  Congress  in  1890  made  Trusts  in  restraint  of 
trade  illegal,  and  the  persons  involved  liable  to  prosecution. 
Many  Federal  investigations  of  Trusts  followed.  To  evade  law 
and  to  place  their  beneficiaries  or  retainers  in  high  pivotal  po- 
litical office,  various  Trusts  resorted  to  corruption  whenever 
the  need  arose.  The  Trust  issue  was  long  a  furious  one  in  Amer- 
ican political  campaigns,  and  the  resounding  excitement  cen- 
tered general  attention  upon  America  as  the  country  under  the 
yoke  of  the  Trusts. 

Yet  at  the  same  time  the  movement  to  consolidate  industry 
into  great  organizations  of  capital  had  been  proceeding  in 
Europe.  Britain  had  its  industrial  combinations;  but  they  were 
termed  "pools"  or  "rings,"  and  their  progress  was  unattended 
by  the  inimical  clamor  of  popular  agitation.  On  the  contrary, 
their  legal  fiat  came  early.  In  1891  British  shipowners  had 
formed  a  combination  to  extend  trade  and  increase  profits.  In 
this  leading  case — the  "Mogul"  case — the  House  of  Lords'  rul- 
ing established  the  legality  of  shipping  "rings,"  and,  in  subse- 
quent years,  further  sanctioning  decisions  followed. 

When  complaints  were  made  about  this  monopoly,  which  had 
raised  rates  on  almost  all  ocean  routes,  Parliament  stirred  and 
ordered  an  investigation.  The  result  was  wholly  palatable  to 
the  shipowners.  The  public,  a  minority  of  the  investigating 
committee  reported,  was  bled  in  higher  rates.  The  committee's 


244  AMERICA  STRIKES  BACK 

majority  report  admitted  existence  of  a  "limited  monopoly," 
raising  of  rates,  payment  of  secret  rebates  and  other  arbitrary 
acts.  But,  taking  the  stand  that  most  shipowners  were  "public- 
spirited  men,"  it  could  see  no  reason  for  Government  action — 
or  rather  "interference."  If  merchants  and  shippers  had  to  have 
a  remedy,  the  committee's  majority  accommodatingly  sug- 
gested, they  could  organize  counter  combinations.5 

Year  after  year  the  reports  of  British  shipping  corporations 
to  stockholders  told  of  great  profits,  often  on  progressively 
watered  stock.  Equally  prolific  in  returns  were  other  British 
combinations  controlling  the  iron,  coal,  textile,  dyeing,  thread, 
soap,  tobacco,  wall-paper,  salt  and  other  industries,  all  heavily 
overcapitalized  on  not  much  more  than  the  intangible  item  of 
"good  will."  So  certain  of  their  prospects  were  many  of  these 
combinations  that  to  attract  the  ordinary  investor  they  held 
out  alluring  expectations  of  seven  or  eight  per  cent  dividends.6 

In  the  course  of  two  decades  of  consolidations  and  other  pa- 
per operations,  the  great  British  railway  companies  had  ex- 
panded their  capital  stock  to  the  colossal  sum  of  £1,000,000,- 
000.  The  object  of  this  watering  was  to  keep  up  rates  and  fares, 
and  to  prevent  construction  of  competing  lines.  And  the  meth- 
ods used  in  stock  issues  were  of  such  intricacy  and  so  well  cov- 
ered that  only  by  the  most  arduous  labor  could  an  outsider  un- 
ravel the  tangle.7  As  to  other  combinations,  the  time  was  not 
far  distant  when  English  banks  were  virtually  merged  into  six 
institutions  having  huge  financial  power,  and  when  powerful 
mergers  in  the  chemical,  rubber,  tin  and  other  mining  indus- 
tries were  consummated.  Meanwhile,  much  British  wealth  was 
invested  in  the  securities  of  American  Trusts. 

Glancing  at  continental  Europe  we  find  other  such  great 
concentrations  of  capital.  Germany  was  the  chief  creator  of 
combinations;  there,  in  1897,  three  hundred  and  forty-five 
openly  flourished.  Presently,  the  smaller  combinations  were 
swallowed  by  the  larger.  German  law  did  not  inhibit  combina- 
tions, and  German  court  decisions  dealt  gently,  and  often  fa- 
vorably, with  the  great  syndicates  of  capital.  In  France,  where 
the  penal  code  contained  severe  provisions  against  private 
monopoly,  existing  combinations  had  to  move  with  the  greatest 
caution  and  shroud  their  price  control  agreements  in  well- 


"THE  BITCH-GODDESS  SUCCESS"  245 

guarded  secrecy.  Combinations  controlled  many  branches  of 
industry  in  Austria,  and  had  nothing  to  fear  from  officialdom;  a 
Government  Commission  even  recommended  their  validation 
and  regulation. 

Thus  the  Trust,  which  in  America  so  impressed  Henry  James 
as  an  appalling,  formidable  phenomenon,  had  its  counterparts 
in  various  European  countries — not  to  speak  of  South  America, 
Japan,  Australia  and  New  Zealand.  And  the  dishonestly  acquis- 
itive spirit  which  Wells  construed  as  peculiar  to  America  was 
obviously  commonplace  throughout  the  world.  Wells,  the  man 
who  could  write  "Tono  Bungay,"  had  occasion  enough  to  know 
how  a  spectacular  episode  in  England  had  recently  disclosed 
the  avidity  of  all  classes,  from  peers  down,  to  make  money  by 
following  the  lead  of  a  man  reputed  a  financial  wizard. 

Ernest  Terah  Hooley  was  a  lacemaker,  then  a  stockbroker  in 
Nottingham,  before  he  injected  his  presence  into  financial  Lon- 
don. He  seems  not  to  have  been  exceptionally  able,  but  he  had 
a  conjuring  idea.  This  concerned  the  applying  of  methods  of 
consolidation  to  certain  industries  which  promoters  before  him 
had  ignored.  He  also  had  a  naturally  shrewd  insight  into  the 
weaknesses,  credulity  and  trust  of  the  British  investing  public. 
His  process  was  the  simple  one  of  arranging  to  buy  a  company's 
business  for  more  than  its  value,  obtaining  credit  for  the  trans- 
action, watering  the  stock,  and  then  by  a  "whirlwind"  cam- 
paign selling  the  securities  to  the  public  for  far  more  than  the 
business  was  worth.  This  was  the  era  when  bicycle  riding  was 
the  vogue;  of  the  twenty-six  companies  promoted  by  Hooley 
between  1894  and  1896,  fifteen  were  bicycle  corporations.  Well 
understanding  British  susceptibility  to  titled  names,  he  easily 
secured  lords  to  serve  on  his  boards  of  directors;  other  lords 
deemed  it  a  high  privilege  to  partake  of  financial  dealings  with 
the  "Napoleon  of  Finance" — for  so  he  was  acclaimed. 

His  dealings  totaled  £25,000,000;  he  towered  a  golden 
colossus  in  Britain.  "Fashionable  society,  always  in  a  hurry  to 
get  richer,  hung  on  his  lightest  word,"  editorialized  "The  Econ- 
omist" at  a  later  time.  "Ancient  colleges  and  venerable  deans 
shed  the  light  of  their  countenances  upon  him  with  a  lively 
sense  of  benefits  to  come.  Processions  knew  him  clothed  in  the 


246  AMERICA  STRIKES  BACK 

magnificence  of  a  High  Sheriff.  His  name  connoted  millions." 
From  Lord  Ashburton,  Hooley  bought  an  estate  of  nearly 
11,000  acres  in  Wiltshire  and  paid  for  it  in  stock  of  one  of  his 
companies.  He  then  employed  a  renowned  architect,  giving  him 
carte-blanche  to  put  the  entire  estate  in  first-class  condition; 
£27,000  was  expended  on  buildings  alone.  Hooley  also  bought 
an  estate  of  3,244  acres  in  Essex,  spending  many  thousands  of 
pounds  in  its  improvement.  For  a  yacht — the  Venetia — he  paid 
Lord  Ashburton  £50,000.  Furthermore,  as  subsequent  disclo- 
sures showed,  he  aspired  to  the  distinction  of  a  title  and  had 
handed  in  to  the  proper  recipient  the  sum  agreed  upon  for  the 
purchase  of  a  baronetcy. 

London  had  its  crowd  of  lesser  promoters  to  whom  Hooley 
was  the  idol  of  superior  daring.  To  pass  over  the  schemes  of 
other  promoting  coteries,  we  need  only  notice  as  an  example 
those  then  fattening  on  the  public  by  the  flotation  of  stock  of 
mine  ventures  in  West  Australia — Westralia,  as  it  was  called. 
Apart  from  the  many  mining  companies  organized  in  Westralia 
itself,  hundreds  of  companies  had  in  a  short  time  been  floated 
in  London.  The  total  capital  of  these  Westralia  companies, 
£39,000,000,  was  further  watered,  bringing  it  to  £55,000,000. 
This  was  approximately  the  same  capitalization  as  that  of  all 
the  Transvaal  mines,  including  those  of  the  Rand,  which  in  a 
few  months  produced  as  much  gold  as  did  the  whole  of  Wes- 
tralia in  a  year.  Rosy  prospectuses  gulled  a  swarm  of  investors, 
and  the  promoters  and  stock  vendors  pocketed  on  an  average 
almost  three-fourths  of  the  proceeds  of  Westralia  mine  stock 
sold.8 

Many  of  these  promoters  held  on  both  to  their  harvest  of 
loot  and  to  their  fair  reputations.  But  Hooley's  fate  was  dif- 
ferent. His  pyramided  system  of  credit  inflation  could  not  with- 
stand collapse,  and,  on  June  8,  1898,  he  filed  his  petition  in 
bankruptcy.  His  failure  made  a  great  commotion.  Reflecting 
upon  the  event,  a  leading  London  periodical  noted:  "Consider- 
ing what  a  great  commercial  people  we  have  been  for  centuries, 
it  is  strange  how  easily  a  large  section  of  Englishmen  can  be 
deluded."  Then,  proffering  an  explanation,  it  went  on:  "But  it 
is  safe  to  say  that  the  average  investor  is  most  taken,  not  by 
the  business  matter,  but  by  the  names  on  the  prospectus.  Who 


"THE  BITCH-GODDESS  SUCCESS"  247 

ever  heard  of  Lords  Albermarle  and  De  La  Warr  as  great  finan- 
cial or  business  authorities?  We  say  nothing  as  to  the  financial 
transactions  which  passed  between  them  and  Mr.  Hooley;  but 
even  assuming  that  they  had  never  received  'gifts,'  how  strange 
to  the  rational  mind  that  any  person  should  have  rushed  to  buy 
Hooley  shares  at  a  considerable  premium  because  these  titled 
names  appeared  on  a  prospectus!  In  America  they  would  have 
needed  the  name  of  a  very  strong  Wall  Street  magnate  or  high- 
placed  railway  president,  an  authority  in  the  greater  business 
transactions.  But  here  the  names  of  two  Lords  of  little  or  no 
experience  are  considered  to  be  enough  to  attract  the  county 
clergy,  maiden  ladies  and  shopkeepers  who  are  in  an  especial 
degree  the  victims  of  the  company  promoter."  9 

Hooley  announced  that  he  had  not  benefited  personally  by 
the  large  sums  realized  from  stock-jobbing  operations.  Both  in 
interview  and  in  his  minute,  voluminous  and  sensational  testi- 
mony in  the  bankruptcy  proceedings,  he  asserted  that  finan- 
cial journalists  had  squeezed  considerable  sums  from  him, 
either  to  assure  favorable  publicity  or  by  the  threat  of  criti- 
cism. He  exonerated  the  owners  of  any  knowledge  concerning 
these  transactions,  but,  so  he  said,  a  single  article  in  one  finan- 
cial journal  cost  him  £10,000.  The  representative  of  another 
such  publication  blackmailed  him  for  £40,000.  Every  time  he 
organized  a  new  company,  he  stated,  at  least  twenty  of  these 
men  besieged  him  in  the  corridor  of  the  Midland  Grand  Hotel 
where  he  stayed,  and  openly  demanded  of  him:  "Well,  what  are 
we  going  to  get  out  of  this?" 

"This,"  "The  Economist,"  of  London,  editorially  commented 
on  June  11,  1898,  "is  by  no  means  the  first  time  that  charges  of 
gross  corruption  have  been  leveled  against  a  section  of  the 
financial  press,  but  the  charges  have  been  put  forward  in  a  con- 
crete form  upon  very  few  occasions,  although  it  is  notorious 
that  large  sums  of  money  are  continually  being  paid  away 
either  for  newspaper  puffs  of  companies  or  for  the  suppression 
of  unfavorable  criticism.  And  if  one  of  the  results  of  Mr. 
Hooley's  failure  is  the  exposure  of  malpractices  of  the  kind 
suggested,  that  failure  will  be  anything  but  an  unmixed  evil,  for 
nothing  could  be  more  contemptible  than  for  journals  professing 
to  guide  and  protect  the  investing  classes  to  enter  into  a  lucra- 


248  AMERICA  STRIKES  BACK 

tive  conspiracy  with  company  magnates  to  defraud  those  who 
follow  their  advice.  The  system  is  a  gross  public  scandal." 

The  testimony  by  Hooley  before  the  Registrar  in  Bank- 
ruptcy was  viewed  in  England  as  disgraceful  revelations  of 
political  corruption.  "They  leave  a  bad  taste  in  the  mouth," 
commented  "The  Times"  of  London.  "The  case  reeks  with 
moral  garbage,"  declared  "The  Spectator."  Hooley  had  related 
that  when  Sir  William  Marriott  was  introduced  to  him,  Marriott 
informed  him:  "I  do  all  of  the  dirty  work  for  the  Conservative 
Party."  Hooley  told  under  oath  how  he  had  paid  £1,000  for  ad- 
mission to  the  Carlton  Club,  the  Conservative  stronghold,  and 
how  he  had  contributed  two  checks,  each  for  £5,000,  to  Lord 
Abergavenny  for  the  Conservative  Party's  campaign  fund. 
Further,  Hooley  related  his  bargaining  with  Marriott  to  have 
himself  made  a  baronet  at  the  distribution  of  honors  at  Queen 
Victoria's  jubilee  celebration.  Hooley  unsuccessfully  haggled 
to  have  the  sum  fixed  at  £35,000;  he  had  to  pay  £50,000,  the 
amount  asked.  Rumors  of  Hooley 's  imminent  bankruptcy  had 
already  spread,  but  when  the  £50,000  check  was  taken  to 
a  prominent  London  bank  for  inquiry,  the  assurance  was  given 
that,  of  course,  the  check  of  a  man  worth  at  least  £1,000,000 
would  be  honored.  Perhaps  Premier  Lord  Salisbury  knew  too 
much  of  Hooley's  devious  methods  and  hazardous  position,  and 
judged  the  risk  of  recommending  him  for  a  baronetcy  too  great ; 
whatever  the  reasons,  Hooley's  name  was  not  included  in  the 
list  of  honors,  and  after  several  months  his  £50,000  check  was 
returned.10 

We  need  not  linger  upon  Hooley's  checkered  career.  After 
getting  out  of  bankruptcy  he  continued  to  speculate  in  land 
and  to  float  companies — one  a  Siberian  gold  mine.  The  cul- 
mination came  in  February,  1912,  when  he  was  convicted  of 
obtaining  £2,000  by  fraud,  and  was  sentenced  to  twelve  months' 
imprisonment.  Many  a  British  editor  then  moralized  upon  the 
ignominious  end  of  a  man  who  at  one  time  was  credited  with 
a  magician's  power  in  creating  wealth  by  the  millions  and  in 
dispensing  fortunes. 

Certain  phases  of  the  Hooley  disclosures,  however,  remained 
either  to  disturb  British  conscience  or  vex  British  complacency. 
Often  had  American  campaign  corruption  been  made  the  text 


"THE  BITCH-GODDESS  SUCCESS"  249 

of  preachments  on  the  integrity  of  the  British  system.  In  Amer- 
ica campaign  corruption  was  admitted,  and  what  was  not  spe- 
cifically admitted  was  brought  out  in  Congressional  and  legisla- 
tive investigations.  Trusts,  railroad  companies,  corporations  of 
all  kinds,  and  rich  individuals  periodically  contributed  large 
amounts  for  campaign  election  purposes.  Before  a  special  com- 
mittee of  the  United  States  Senate,  the  president  of  the  Sugar 
Trust  testified  that  this  "politics  of  business"  was  the  custom 
of  "every  individual  and  corporation  and  firm,  Trust,  or  what- 
ever you  like  to  call  it."  J1  He  further  testified  that,  in  State 
campaigns,  the  dominant  party  always  received  the  contribu- 
tion. The  funds  were  variously  used.  Emissaries  were  employed 
to  influence  the  trade-unions.  Newspapers  were  bought  up  or 
filled  with  provided  editorials  or  with  partisan  matter  repre- 
sented as  news.  Foreign-language  newspapers  were  subsidized. 
A  host  of  "orators"  were  sent  out  to  "spellbind."  And  wherever 
votes  could  be  bought  they  were  bought. 

So  much  for  America.  But  now  English  editors  were  again 
driven  to  acknowledge  that  political  corruption  was  not  con- 
fined to  America — that  Britain  had  its  own  kind,  whereby  the 
patronage  of  the  Government  was  prostituted  in  order  to  fill 
the  campaign  fund  on  the  eve  of  a  general  election.  Unlike  the 
American  plan,  the  English  system  did  not  require  so  crude  an 
expedient  as  the  general  conscription  of  funds  for  election.  In 
England  the  party  managers  recommended  to  the  Prime  Min- 
ister wealthy  candidates  for  peerages,  baronetcies  and  knight- 
hoods— the  aspirants,  meanwhile,  sending  large  sums  of  money 
to  the  political  clubs.  Recalling  that  the  claim  of  wealth  as  a 
title  of  entree  to  the  peerage  had  long  since  been  conceded  in 
England,  one  London  periodical  discoursed:  "Forty  years  ago 
everybody  said  simple  knighthood  was  contemptible,  unworthy 
even  of  a  Lord  Mayor,  but  today  a  good  many  persons  are 
willing  to  purchase  that  lowest  of  titular  distinctions  for  £25,- 
000.  .  .  .  Moreover,  the  English  with  all  their  virtues,  and 
they  have  many,  are  plutocrats  at  heart.  They  reverence  wealth, 
they  like  those  who  lead  them  to  be  rich,  and  if  titles  were  sold 
in  open  market,  they  would  purchase  them  as  evidence  of 
riches."  And  again  in  the  same  periodical:  "Unfortunately,  the 
multiplied  chances  to  be  very  rich  have  not  only  turned  men's 


250  AMERICA  STRIKES  BACK 

heads,  but  they  have  weakened  their  morals.  .  .  .  Even  in 
England,  in  spite  of  all  that  legislation  has  done — and  we  gladly 
admit  that  in  this  country  it  has  done  much — we  doubt  if, 
among  large  classes  of  the  electorate,  bribery  is  looked  upon 
with  the  severe  moral  reprobation  which  one  would  like  to  see. 
.  .  .  While  actual  gifts  of  money  to  voters  are  very  rare,  while 
expenditure  is  not  permitted  by  law  on  the  great  scale  of  former 
years,  nevertheless  the  constant  checks  forwarded  to  local 
bodies  by  Members  [of  Parliament]  on  the  one  hand,  and  the 
directorships  of  companies  assumed  by  Members  [of  Parlia- 
ment] who  are  not  especially  noted  for  business  gifts  on  the 
other  hand,  appear  to  show  a  laxity  of  view  regarding  absolute 
financial  honor  which  at  times  fills  one  with  a  certain  misgiv- 
ing as  to  the  future."  12 

Charges  were  made  that  the  conferring  of  titles  was  but  one 
way  in  which  the  British  Ministry  paid  off  campaign  contribu- 
tions. Directing  attention  to  grants  of  public  money  to  special 
"interests,"  "The  Economist"  on  August  12,  1899,  bluntly  de- 
clared that  the  Government  had  given  the  impression  that  it 
was  paying  off  its  election  debts  to  its  supporters,  and  was 
thereby  introducing  the  worst  feature  of  American  politics — 
"though  it  might  perhaps  be  better  described  as  reviving  the 
old  methods  practiced  in  England  in  the  last  century."  Then 
followed  this  discharge:  "It  is  undeniable  that  during  the  Ses- 
sion just  ended  there  has  been  an  atmosphere  of  money  in  the 
lobby  and  precincts  of  the  House  of  Commons  scarcely  noticed 
before.  All  manner  of  'interests'  have  gathered  there  as  they 
gather  in  Washington  and  in  the  various  State  Legislatures  of 
America.  More  attempts  to  influence  the  votes  of  members  have 
been  made  than  has  been  known  before,  or,  at  any  rate,  than 
members  can  recollect  since  the  days  of  railway  construc- 
tion." 

A  singular  disclosure  seeming  to  confirm  this  charge  came 
out  unexpectedly  in  later  years.  It  was  a  regular  practice  of 
"The  Economist"  to  publish  full  stenographic  accounts  of  the 
annual  meetings  of  stockholders  of  companies.  At  such  a  yearly 
meeting  of  the  London  United  Tramways,  in  January,  1912, 
the  chairman  reported,  among  other  items,  legal  expenses  in- 
curred. R.  F.  Parker,  a  stockholder,  arose  and  drew  critical  at- 


"THE  BITCH-GODDESS  SUCCESS"  251 

tention  to  the  law  charges  and  Parliamentary  expenses.  It 
might  have  been  possible  in  the  course  of  the  past  fifteen  or 
sixteen  years,  he  protested,  to  have  saved  some  of  the  great 
amounts  spent  in  Parliamentary  matters.  Expenses  of  that 
kind,  he  urged,  should  in  future  receive  the  serious  considera- 
tion of  the  board  of  directors.  The  stenographic  account  pro- 
ceeded: "The  chairman,  in  reply,  said  that  there  was  no  desire 
on  the  part  of  the  directors  to  go  into  more  Parliamentary  busi- 
ness than  was  necessary.  He  wished  the  stockholders,  however, 
to  remember  that  they  had  a  great  many  concessions  [fran- 
chises] and  when  those  concessions  were  nearly  run  out,  they 
had  to  go  to  Parliament  to  get  them  renewed,  or  allow  them 
to  lapse  altogether."  13  This  was  one  of  the  rare  leakages  oc- 
cur ing  in  the  affairs  of  British  corporations,  and  was  quite  ac- 
cidental; there  was  a  grievous  oversight  somewhere  in  not  cen- 
soring that  report. 

The  sale  of  titular  honors  continued  a  favorite  means  of 
raising  campaign  funds.  Denouncing  the  practice,  O.  Locker- 
Lampson,  a  member  of  the  House  of  Commons,  sought,  on 
May  19,  1914,  to  obtain  leave  of  that  body  for  the  introduc- 
tion of  a  bill  prohibiting  the  traffic.  Many  of  the  persons  re- 
cently receiving  titles,  he  pointed  out,  were  astonishingly  medi- 
ocre, and  the  amazing  size  of  some  of  the  party  funds  could 
not  be  wholly  unrelated.  He  went  on:  "Titles,  like  boots  and 
shoes  and  even  potatoes,  have  become  marketable  commodi- 
ties, and  are  dealt  in  as  such.  There  is  a  division  of  labor  on 
the  Front  Treasury  Bench,  because  while  the  Chancellor  of 
the  Exchequer  is  busy  catering  for  the  million,  the  Chief  Whip 
of  the  Party  is  busy  catering  for  the  millionaire."  Locker- 
Lampson  characterized  the  House  of  Lords  as  "the  Mecca  of 
Snobs."  A  sardonically  amusing  argument  was  made  by  J.  M. 
Hogge  in  opposing  the  motion.  "Bear  in  mind,"  he  urged,  "that 
we  want  to  preserve  our  nobility  and  that  an  infusion  of  fresh 
blood  will  prevent  it  from  declining.  It  improves  our  stock. 
.  .  .  Look  at  the  traffic  in  titles  between  this  country  and 
America.  There  is  no  tariff  on  the  importation  of  American 
heiresses,  and  it  surely  is  necessary  ...  to  secure  increased 
capital  from  abroad,  and  that  can  only  be  secured  by  multiply- 
ing the  present  titles  that  exist  in  the  country."  14 


252  AMERICA  STRIKES  BACK 

Parliament  still  abounded  with  members  who  held  director- 
ships in  corporations.  Of  the  House  of  Lords,  a  number  were 
what  were  dubbed  "guinea  pigs" — lords  serving  in  the  capacity 
of  decorative  directors.  But  there  were  other  members  who 
owned  vast  corporate  holdings,  which  they  secured  by  their 
own  influential  power.  An  instance  was  the  British  South  Africa 
Company,  the  incorporators  of  which  were  the  Duke  of  Aber- 
corn,  the  Duke  of  Fife,  Lord  Gifford,  Cecil  Rhodes,  diamond 
magnate  Alfred  Beit,  and  others.  In  1889  this  company  ob- 
tained a  sweeping  charter,  vesting  in  it  an  enormous  area  of 
land  and  the  authority  to  engage  in  almost  any  kind  of  busi- 
ness or  undertaking.  It  was  empowered  to  establish  steamship 
lines,  railways,  telegraphs,  carry  on  mining  and  industries,  grant 
lands — in  brief,  to  do  anything  it  wanted,  even  to  the  making 
of  laws  and  the  maintaining  of  a  military  police  force.  It  was 
the  greatest  chartered  company  created  in  modern  times,  and 
its  powers  were  qualified  in  only  one  respect.  The  British  Gov- 
ernment reserved  the  right  to  alter  or  repeal  any  of  the  provi- 
sions, or  to  enact  others,  at  the  end  of  twenty-five  years  from 
the  charter's  date  and  every  decade  thereafter.15  Grave  charges 
that  company  men  had  knowledge  of  the  Jameson  raid  in  the 
Transvaal  before  the  Boer  War  were  doubtless  instrumental 
in  causing  the  issue,  in  1900,  of  a  supplemental  charter  to  de- 
prive the  company  of  its  law-making  and  military  powers.16 

The  wealth-producing  possibilities  of  this  company  were 
thought  to  be  of  such  magnitude  that  there  was  a  rush  of  Eu- 
ropean investors  to  obtain  stock.  The  company's  original  cap- 
ital was  a  million  shares  at  £1  each.  There  was  great  specula- 
tion in  the  stock,  the  price  of  which  was  boomed  to  £8  a  share. 
A  report  to  the  House  of  Commons,  in  1895,  showed  that  of 
nearly  fifteen  thousand  stockholders,  three  thousand  were 
French  holding  more  than  252,000  shares,  and  four  hundred 
and  fifty  were  German  with  38,370  shares.  But  development  of 
Rhodesia  was  slow,  dividends  were  matters  of  gradual  future 
development,  and  the  price  of  stock  fell  below  par.  The  com- 
pany's heads  had  to  console  stockholders  with  visions  of  future 
profits  from  its  extensive  land  possessions,  its  huge  power  sites, 
and  its  gold  and  copper  mining  in  the  area  of  450,000  square 
miles  over  which  it  held  domain.  And  to  the  applause  of  as- 


"THE  BITCH-GODDESS  SUCCESS"  253 

sembled  stockholders,  the  company's  spokesman  boasted  that  its 
land  rights  "made  the  British  South  Africa  Company  incom- 
parably the  greatest  land  owning  company  in  the  world."  17 

Agitation  was  recurrent  over  directorships  in  corporations 
held  by  Cabinet  Ministers.  In  1900  there  had  been  a  loud  scan- 
dal concerning  the  financial  interests  controlled  by  Colonial 
Secretary  Joseph  Chamberlain  and  members  of  his  family  in 
corporations  that  were  securing  Government  contracts.  Cham- 
berlain had  signalized  his  entry  into  political  life  by  exposing 
a  crooked  official  in  Birmingham.  After  entering  Parliament  as 
a  Liberal  Unionist,  in  1885  Chamberlain  had  severely  attacked 
Prime  Minister  Lord  Salisbury,  Conservative  Party  leader, 
because  Salisbury  and  his  friends  in  the  House  of  Lords  had 
insisted  upon  putting  in  an  Act  a  clause  the  effect  of  which  was 
calculated  to  give  an  enormously  enhanced  value  to  Salisbury's 
own  property  in  London.  Now,  on  December  10,  1900,  Joseph 
Chamberlain,  his  son,  J.  Austen  Chamberlain,  Financial  Secre- 
tary of  the  Treasury,  and  Arthur,  a  brother  of  Joseph,  were 
criticized  in  the  House  of  Commons  by  David  Lloyd  George. 
No  charge  of  corruption  was  made  by  Lloyd  George,  who  simply 
stated  facts  of  record. 

Joseph  Chamberlain,  as  Colonial  Secretary,  had  issued  strict 
orders  to  his  subordinates  forbidding  them  to  have  any  interest 
in  companies  that  did  business  with  the  Government.  Thus  be- 
ginning, Lloyd  George  referred  to  recent  cases  of  Cabinet  Min- 
isters, some  of  whom  were  directors  of  companies  having  Gov- 
ernment contracts,  and  others  of  whom  were  stockholders  in 
companies  contracting  with  their  own  departments.  As  to  the 
Chamberlain  family,  Lloyd  George  specified  that:  1)  While 
Colonial  Secretary,  Joseph  Chamberlain  was  a  stockholder  (the 
number  of  shares  was  stated)  in  the  Colombo  Commercial 
Company,  which  was  awarded  a  Government  contract  to  build 
barracks  or  huts  in  Ceylon  for  Boer  prisoners  of  war.  2)  That 
he  was  a  considerable  stockholder  in  the  Birmingham  Trust 
(Company),  which  in  turn  was  a  large  stock  owner  in  Tubes, 
Limited,  and  in  Elliott's  Metal  Company.  Formed  to  acquire 
bicycle  companies,  Tubes  had  sunk  to  bad  condition,  and 
Arthur  Chamberlain  was  brought  in  to  save  it.  He  did  so  by 
converting  it  into  a  boiler-tube  manufactory;  contracts  were 


254  AMERICA  STRIKES  BACK 

secured  from  the  British  Admiralty,  and  the  company  was  now 
making  a  profit  of  £10,000  a  year  as  contractors  to  the  British 
Navy.  Joseph  Chamberlain  transferred  his  stock  in  Elliott's 
Metal  Company  to  his  son;  practically  half  of  the  company's 
stock  was  owned  by  the  Chamberlain  family;  and  the  company 
had  contracts  to  supply  large  quantities  of  materials  to  the 
naval  dockyards.  3)  In  Knoch's,  manufacturers  of  cordite  and 
other  munitions  of  war,  another  Chamberlain  had  an  interest; 
likewise  the  Chamberlain  family  in  another  company.  Favorit- 
ism in  the  awarding  of  Government  contracts,  it  was  charged, 
was  shown  to  one  company.18 

During  the  discussion  in  the  House  of  Commons,  Sir  Henry 
Campbell-Bannerman  quoted  with  approval  this  rule  proposed 
by  "The  Economist":  If  a  Cabinet  Minister  happened  to  be 
directly  or  indirectly  connected  with  any  company  the  divi- 
dends of  which  were  affected  by  his  influence,  he  should  sever 
his  directorship  before  taking  office.  When  Campbell-Banner- 
man became  Prime  Minister  a  few  years  later  he  announced, 
in  forming  his  Administration,  that  he  would  consider  anyone 
holding  corporation  directorship  ineligible  to  serve  in  his  Cab- 
inet. That  pronouncement,  however,  applied  to  Cabinet  Min- 
isters only;  and  as  it  had  no  legal  force,  never  going  beyond  the 
plane  of  an  ethical  stand  and  an  individual  ruling,  it  had  neither 
permanence  nor  effectiveness. 

So,  in  the  House  of  Commons,  on  March  26,  1913,  Swift 
MacNeill  asked  H.  H.  Asquith,  now  Prime  Minister,  whether 
the  Government  would  consider  introducing  legislation  to  make 
illegal  the  holding  of  corporation  directorships  by  Cabinet  Min- 
isters. "I  think  the  rule  is  a  good  one,"  replied  Asquith,  "but 
I  do  not  see  my  way  to  introduce  legislation  to  make  it  binding 
upon  future  Administrations."  MacNeill  inquired  whether  As- 
quith was  not  aware  that  in  a  prior  Administration  eleven  Cab- 
inet Ministers  held  seventeen  corporation  directorships,  and 
fifteen  Administration  heads  held  twenty-five  directorships 
among  them?  Asquith  remained  silent.  Somewhat  more  than  a 
fortnight  later  MacNeill  resumed  the  subject,  asking  Asquith 
to  furnish  a  report  as  to  corporate  directorships  held  by  Cabinet 
Ministers.  "The  information  sought,"  said  Asquith,  "is  obtain- 
able without  difficulty  from  other  sources."  MacNeill  pressed: 


"THE  BITCH-GODDESS  SUCCESS''  255 

"I  cannot  for  the  life  of  me  ascertain  what  contracts  of  Gov- 
ernment departments  are  being  executed  by  companies  whick 
have  Ministerial  directors.  Will  he  [Asquith]  make  a  compro- 
mise with  me  and  give  me  a  return  [formal  report]  of  the  con- 
tracts which  the  Government  had  with  the  Royal  Mail  Com- 
pany when  Lord  Selbourne  was  one  of  the  directors?"  Asquith: 
"I  should  be  very  sorry  to  make  any  such  promise.  Neither  do 
I  think  that  for  the  life  of  me  I  could  grant  the  return."  19 

Meanwhile,  Lloyd  George,  now  Chancellor  of  the  Exchequer, 
and  Attorney-General  Sir  Rufus  Isaacs  were  under  fire  for  a 
transaction  which  caused  much  talk  out  of  Parliament  and  ex- 
citement in  it.  Marconi's  invention  of  wireless  telegraphy  had 
been  commercialized  by  newly  organized  companies.  The  Eng- 
lish Marconi  Company  was  the  largest  stockholder  in  the  Amer- 
ican Marconi  Company,  and  Godfrey  Isaacs,  a  brother  of 
Rufus,  was  a  managing  director  of  the  English  Marconi  Com- 
pany. A  contract  with  the  English  Marconi  Company  was  made 
by  Postmaster-General  Herbert  Samuel  for  the  establishment 
of  a  chain  of  wireless  stations  throughout  the  British  Empire. 

So  thick  were  the  rumors  regarding  the  circumstances  of 
this  contract  that  Postmaster-General  Samuel  forestalled  op- 
ponents by  himself  moving  in  the  House  of  Commons,  on  Octo- 
ber 11,  1912,  for  a  Select  Committee  to  investigate.  This  motion 
opened  the  way  for  sundry  members  to  express  themselves. 
The  contract,  said  Sir  Henry  Norman,  had  been  criticized  on 
two  grounds — first  that  it  was  a  bad  bargain,  and  second  "that 
it  is  a  bargain  tainted  with  corruption."  He,  Norman,  believed 
such  criticism  preposterous,  but,  he  urged,  the  persons  who  had 
made  charges  ought  to  be  summoned.  "Grave  rumors  are  all 
over  the  city,"  said  George  Lansbury,  Labor  member,  "that 
people  have  made  money  out  of  the  business  who  ought  not 
to  have  made  money  out  of  it."  Both  Lloyd  George  and  Sir 
Rufus  Isaacs  demanded  to  know  what  the  rumors  and  charges 
were.  "I  made  no  charge,"  Lansbury  replied.  "All  that  I  have 
said  is  that  there  has  been  disgraceful,  scandalous  gambling  in 
the  shares."  Rufus  Isaacs  and  Lloyd  George  had  the  oppor- 
tunity then  and  there  to  tell  of  their  participation,  but  neither 
divulged  a  word.  Postmaster-General  Samuel  made  an  explicit 
statement  that,  "Neither  I  myself  nor  any  of  my  colleagues 


256  AMERICA  STRIKES  BACK 

have  had  at  any  time  one  shilling's  worth  of  shares  in  this 
company,  directly  or  indirectly,  or  have  derived  one  penny 
profit  from  the  fluctuations  in  price."  20 

However,  as  later  specifically  published,  the  main  facts 
were:  Attorney-General  Rufus  Isaacs  had  bought  10,000  Amer- 
ican Marconi  shares  as  a  speculation,  and  he  had  induced  Lloyd 
George  and  another  Ministerial  colleague  to  take  1 ,000  shares 
each.  All  swore  that  they  had  lost  money  in  the  speculation, 
for  the  stock  had  fallen  from  a  boom  to  a  low  price.  Here  at 
any  rate  was  the  delectable  sight  of  how  Rufus  Isaacs,  one  of 
the  cleverest  of  lawyers,  Lloyd  George,  the  cleverest  of  clever 
politicians,  and  an  associate  who  was  the  cleverest  of  wire- 
pullers, had  stepped  into  a  pitfall.  Differing  slightly,  the  Select 
Committee's  reports  exonerated  the  Cabinet  Ministers  con- 
cerned from  any  corrupt  thought  or  act.  The  main  report  was 
a  complete  vindication.  That  of  the  Conservative  members  was 
likewise,  but  it  did  think  that  unwittingly  the  Attorney-General 
had  placed  himself  in  a  position  where  private  interest  might 
easily  have  conflicted  with  public  duty. 

In  the  ensuing  debate  in  the  House  of  Commons,  on  June  13, 
1913,  Sir  Rufus  Isaacs  and  Lloyd  George  frankly  admitted 
that  in  making  the  investments  they  had  been  ill-advised.  They 
might  have  added  that  the  most  astute  of  legal  luminaries  and 
politicians  could  be  the  worst  of  amateurs  in  stock  speculation 
— a  fact  well  attested  in  many  countries.  Prime  Minister 
Asquith  spoke  at  length  upon  the  move  to  prohibit  Cabinet  Min- 
isters from  owning  stock  in  any  company  with  which  the  Gov- 
ernment had  or  might  have  a  contract.  He  declared  the  pro- 
posal an  absurdity.  But,  he  concluded,  a  stock-owning  Minister 
should  disclose  his  holdings,  and  stand  aside  while  the  contract 
was  being  made.  And,  furthermore,  no  Cabinet  Ministers  should 
enter  into  any  transaction  whereby  their  private  pecuniary  in- 
terests might  conflict  with  public  duty.  Asquith  put  these  prin- 
ciples upon  the  ground  of  ethics,  but  he  failed  to  see  that  they 
should  also  apply  to  stock-owning  members  of  Parliament  while 
voting  on  legislation  that  affected  their  individual  financial  in- 
terests. 

Finally,  after  considering  various  motions,  accompanied  by 
maneuvers  and  by  "conversations"  behind  the  scenes,  the 


"THE  BITCH-GODDESS  SUCCESS"  257 

House  of  Commons  found  a  self-satisfying  solution  as  to  the 
disposition  of  the  Rufus  Isaacs-Lloyd  George  matter.  Com- 
mons adopted  a  resolution  which  accepted  expressions  of  re- 
gret made  by  these  men  for  not  having  mentioned  their  stock 
purchases  in  the  debate  of  October  1 1 ;  acquitted  them  of  act- 
ing otherwise  than  in  good  faith;  and,  "reprobates  the  charges 
against  Ministers  which  have  proved  to  be  wholly  false."  21 

Sir  Rufus  Isaacs  was  later  created  Lord  Reading,  and  for  a 
time  was  British  Ambassador  at  Washington. 


CHAPTER   XIX 
RUBBER  MADNESS  AND  WORLD  TRADE 

IN  his  purely  literary  productions  Maurice  Maeterlinck,  Bel- 
gian poet,  playwright  and  essayist,  showed  penetrating  indi- 
viduality. In  his  attitude  toward  America,  however,  he  aligned 
himself  with  a  fashion  when  he  stigmatized  the  American  peo- 
ple as  exhibiting  "the  most  pitiless  commercialism  in  the  world." 
At  the  time  of  Maeterlinck's  statement  his  own  country,  headed 
by  King  Leopold  II,  had  recently  been  exposed  as  responsible 
for  a  commercialism  so  murderous  as  to  make  all  other  expo- 
sures elsewhere  tame  in  comparison,  and  to  shock  a  world 
grown  callous  to  revelations  of  inhumanity  in  pursuit  of  trade. 

The  invention  of  rubber-tired  vehicles,  first  the  bicycle  and 
then  the  automobile,  created  an  ever-mounting  demand  for 
rubber.  There  was  a  concerted  rush  in  several  European  coun- 
tries to  form  corporations  for  the  acquiring  and  exploiting  of 
rubber-producing  regions.  These  lay  in  the  tropics  where  a 
variety  of  trees  yielded  a  sap  which  was  worked  into  rubber. 
In  the  Congo  district  of  Africa,  Belgium  possessed  an  estimated 
900,000  square  miles  of  territory,  equal  to  nearly  one-third  of 
the  expanse  of  the  United  States  of  America.  This  vast  domain 
had  been  constituted  the  Congo  Independent  State  by  a  Con- 
gress of  European  powers,  which  decreed  King  Leopold  sover- 
eign. Under  his  supervision,  bureaus  at  Brussels  administered 
the  Congo  colony's  affairs,  with  a  proconsular  representative  at 
Boma,  recently  no  more  than  an  inland  post,  but  now  styled 
the  Congo's  capital. 

As  in  other  parts  of  Africa,  the  tribes  in  the  Congo  had  col- 
lectively owned  the  land.  This  communal  system  was  abolished 
by  the  Belgian  Government,  and  the  entire  territory  was  claimed 
as  the  private  property  of  the  Belgian  State,  which  parceled 
out  huge  areas  to  great  corporations  called  concessionaires.  A 
native  population  of  30,000,000  was  put  under  the  direct  domi- 

258 


RUBBER  MADNESS  AND  WORLD  TRADE     259 

nation  of  exploiters  whose  every  order  and  movement  was 
backed  by  armed  troops.  At  first  the  corporations  applied  them- 
selves to  the  trade  in  ivory,  palm  oil,  nuts  and  some  other  com- 
modities, but  with  the  swelling  demand  for  rubber  they  turned 
their  chief  efforts  to  that  product. 

Presently  the  British  Government  received  memorials  from 
English  philanthropic  societies  whose  missionaries  were  in  the 
Congo,  and  like  reports  from  British  consuls  there.  These  com- 
munications all  told  of  systematic  atrocities,  seemingly  in- 
credible but  vouched  for  as  absolutely  true.  Upon  every  Congo 
village  was  laid  a  rubber-collecting  imposition,  and,  if  villages 
failed  to  gather  and  deliver  the  required  amount,  the  troops 
of  concession  companies  destroyed  them,  made  the  men  prison- 
ers, and  gave  away  or  sold  their  wives.  The  shooting  of  natives 
for  slight  reason  or  none  at  all  was  tragically  frequent,  and  as 
proof  that  the  soldiers  had  fully  done  their  merciless  duty,  there 
was  general  mutilation  of  the  dead.  Mutilation  of  the  living  was 
a  prevalent  cruelty  inflicted  as  "punishment"  at  the  arbitrary 
will  of  commanders.  Such  were  some  of  the  charges;  and,  in- 
dependently of  memorials  and  reports,  the  British  press  pub- 
lished accounts  which  fired  even  the  most  phlegmatic  tempera- 
ments. 

The  British  Government  was  stirred  to  action.  In  1903  Lord 
Lansdowne,  Secretary  of  State  for  Foreign  Affairs,  wrote  to 
British  Ambassadors  at  the  various  European  capitals.  There 
was,  he  stated,  a  wide  and  grave  suspicion  in  England  that 
many  of  the  charges  were  founded  upon  truth.  The  time  had 
come,  he  declared,  when  the  British  Government  had  to  con- 
sider whether  the  Powers  signatory  to  the  Treaty  of  Berlin 
regarded  the  system  in  the  Congo  consonant  with  the  Treaty's 
provisions.  Furthermore,  it  was  competent  to  question  whether 
the  granting  to  concession  companies  of  vast  areas  of  territory 
with  complete  monopolies  of  trade  was  permissible.1 

Driven  now  to  take  notice  of  the  charges,  the  Belgian  Gov- 
ernment denied  the  existence  of  any  systematic  regime  of 
cruelty  and  oppression  in  the  Congo.  It  put  the  Aborigines' 
Protection  Society  in  the  category  of  irresponsible  accusers. 
The  term  "Congo  atrocities,"  it  asserted,  was  invented  by  Eng- 
lish and  other  adventurers  who,  it  more  than  hinted,  were  moti- 


260  AMERICA  STRIKES  BACK 

vated  by  commercial  jealousy.  As  tending  to  support  this 
imputation,  the  Belgian  official  statement  pointed  to  circumstan- 
tial facts.  In  1887  the  Congo  Independent  State  had  exported 
hardly  thirty  tons  of  rubber,  but  after  1895  the  Congo  rubber 
trade  had  developed  remarkably,  exports  rising  from  10,000,- 
000  francs  in  1895  to  50,000,000  francs  in  1902.  The  annual 
collection  of  rubber  in  the  Congo  now  amounted  to  five  thousand 
tons  which  were  sold  at  Antwerp.  It  was  after  this  great  increase 
began,  the  Belgian  statement  held,  that  the  campaign  atroc- 
ity charges  was  started. 

Passing  to  another  line  of  defence,  Belgium  claimed  for  it- 
self the  credit  of  having  civilized  the  Congo.  Then,  expressing 
surprise  at  England's  stand,  the  Belgian  statement  declared: 
"She  certainly  has  not  escaped  criticism  in  regard  to  her 
numerous  and  bloody  wars  against  native  populations,  nor  the 
reproach  of  oppressing  natives  and  invading  their  liberty."  2 
With  full  grounds  Belgium  might  have  accused  some  other 
European  nations  whose  inroads  in  Africa  were  marked  by 
slaughter;  at  that  very  time  the  Germans  in  German  South- 
west Africa  were  butchering  the  resisting  Herreros,  and  had 
established  a  system  closely  resembling  slavery  among  tribes 
in  their  power. 

The  British  Government  ordered  Sir  Roger  Casement,  Con- 
sul at  Boma,  to  investigate  Congo  conditions.  His  elaborate  re- 
port, giving  full  evidence,  confirmed  most  of  the  charges.  The 
infamies  practised  on  helpless  natives  to  instil  terror  and  en- 
sure obedience  were  set  forth  in  detail.  Women  were  held  as 
prisoners  to  compel  their  husbands  to  bring  in  the  prescribed 
amount  of  rubber  on  each  market  day.  Under  armed  guards 
natives  were  marched  to  the  company  agency,  each  native  car- 
rying his  fortnightly  supply  of  rubber.  Many  natives  had  been 
killed  for  not  having  turned  in  the  required  amount  of  rubber, 
and  mutilation  by  cutting  off  of  hands  was  one  of  the  lesser  pun- 
ishments. "The  Concession  Companies,  I  believe,"  Casement 
reported,  "account  for  the  armed  men  in  their  service  on  the 
ground  that  their  factories  [agencies]  and  agents  must  be  pro- 
tected against  the  possible  violence  of  the  rude  forest  dwellers 
with  whom  they  must  deal;  but  this  legitimate  need  for  safe- 


RUBBER  MADNESS  AND  WORLD  TRADE     261 

guarding  European  establishments  does  not  suffice  to  account 
for  the  presence,  far  from  these  establishments,  of  large  num- 
bers of  armed  men  quartered  throughout  the  native  villages."  3 

In  effect,  the  Belgian  Government  admitted  the  truth  of  a 
number  of  these  charges  when,  in  1906,  it  promulgated  a  series 
of  reform  decrees.  These  prohibited  collection  of  taxes  by  men 
armed  with  guns;  abolished  punitive  expeditions  against  vil- 
lages; and  ordered  the  punishing  of  any  State  functionary  mak- 
ing exactions  from  natives.  But  although  systematic  atrocities 
were  now  formally  forbidden,  systematic  exploitation  remained. 

The  Belgian  Minister  to  England  might,  as  he  did  in  1911, 
represent  Congo  conditions  as  further  improved  by  the  aboli- 
tion of  forced  labor  for  public  works,  and  by  curtailment  of  the 
concession  companies'  power  in  the  reducing  of  holdings  of 
two  of  them  from  30,000,000  to  220,000  acres.  Only  a  few  days 
after  this  statement  had  been  made,  Vandervelde,  a  Socialist 
leader,  produced  in  the  Belgian  Chamber  of  Deputies  a  batch 
of  official  documents.  These  evidenced  that  many  natives,  said 
to  be  "volunteers"  employed  in  Congo  posts  and  stations,  were 
brought  there  by  force  and  held  by  force.  Despite  proclaimed 
law,  the  documents  also  showed,  liquors  were  widely  sold  to 
the  natives.  Another  Belgian  Socialist  leader,  Coppoierters,  de- 
nounced what  he  called  the  continuing  ruthless  exploitation  of 
the  Congo  on  the  most  vicious  of  capitalist  lines,  and  he  as- 
sailed the  concession  companies  as  "making  huge  profits."  Early 
in  the  next  year — 1912 — the  Reverend  J.  Harris,  after  traveling 
five  thousand  miles  of  Congo  territory,  arrived  at  Boma  where 
he  reported  to  British  Consul  Lamont:  "On  the  rubber  planta- 
tions the  contract  labor  is  today  very  largely  impressed  labor, 
or,  as  the  director  of  one  commercial  company  humorously 
termed  it,  Volunteers  by  the  rope/  i.e.,  recruited  and  then  sent 
to  the  plantations  roped  neck  to  neck."  4 

The  Belgian  Government,  remonstrated  a  memorial  of  the 
Congo  Reform  Association  to  the  British  Government  in  1912, 
had  "by  an  unparalleled  act  of  spoliation"  expropriated  all  of 
the  natives'  land  in  the  Congo  and  had  never  repealed  its  act. 
The  memorial  went  on:  "In  many  parts  of  the  British,  French 
and  German  dependencies  [in  Africa]  the  native  population  is 


262  AMERICA  STRIKES  BACK 

allowed  to  cultivate  for  its  own  use  cocoa,  rubber  and  other 
products.  The  population  of  the  Congo  is  debarred  from  such 
enterprises.'7  5 

Nevertheless,  British  as  well  as  other  European  capitalists 
were  concerned  about  their  own  profits  and  heedless  of  the 
natives'  rights  and  welfare.  In  Ashanti,  on  the  west  coast  of 
Africa,  the  British  had  introduced  themselves  by  burning  its 
main  place  or  capital  in  1874,  and  had  formally  annexed  the 
country  in  1896.  The  adjacent  Gold  Coast,  stretching  three 
hundred  and  fifty  miles  along  the  Gulf  of  Guinea,  was  likewise 
under  British  mastery.  When  the  palm  oil,  petroleum,  mineral 
and  other  resources  of  these  colonies  first  attracted  European 
capitalists,  they  had  taken  immediate  steps  to  vest  land  owner- 
ship in  themselves.  They  bribed  the  tribal  chiefs  who  were  the 
trustees  for  the  tribes'  communal  lands.  In  a  report  describing 
how  large  land  concessions  were  thus  made,  an  investigator 
sent  by  the  British  Government  could  see  no  greed  on  the  part 
of  interloping  corporations.  He  saw  only  the  rapacity  of 
the  chiefs,  " whose  sense  of  obligation  to  the  tribe  in  respect  of 
their  trusteeship  was  frequently  obscured  by  their  greed  for 
money."  6 

The  unmitigated  demoralization  of  an  entire  people  went 
on  in  Nigeria,  another  African  territory  under  British  control. 
Nigeria  contained  by  estimate  more  than  300,000  square  miles. 
It  had  a  population  of  about  25,000,000,  and  for  administrative 
purposes  was  divided  into  Northern  Nigeria  and  Southern 
Nigeria.  For  more  than  a  century  Nigeria's  main  staples  of 
palm  oil  and  palm  kernels  had  been  monopolized  by  powerful 
British  chartered  corporations.  The  old  practice  of  drenching 
aborigines  with  liquor  was  methodically  carried  on  by  British 
traders,  who  so  habituated  natives  to  the  use  of  gin  that  to 
them  it  became  both  a  means  of  barter  and  a  sign  of  wealth. 

A  series  of  complaints  by  missionaries  caused  the  appoint- 
ment of  a  Parliamentary  investigating  committee.  Evidence 
showed  the  regular  annual  importation  into  Southern  Nigeria 
alone  of  3,000,000  gallons  of  gin.  "Traffic  in  spirits  practically 
dominates  trade,"  testified  Bishop  Tugwell,  whose  diocese  cov- 
ered the  whole  of  Nigeria  and  who  had  resided  in  that  country 
for  sixteen  years.7  At  the  same  time,  the  head  of  the  Nigeria 


RUBBER  MADNESS  AND  WORLD  TRADE     263 

Investment  Company,  at  a  stockholders'  meeting  in  London, 
was  glorifying  the  marvelous  and  profitable  growth  of  South- 
ern Nigeria's  trade.  He  gave  figures  to  show  the  increase;  and 
directors  and  stockholders  were  in  a  mood  of  mutual  congratula- 
tion.8 Some  great  trading  and  industrial  fortunes  in  England 
came  either  wholly  or  in  part  from  Nigeria's  palm  oil. 

The  discovery  of  tin  in  Northern  Nigeria  opened  up  a  new 
source  of  wealth  to  British  mining  companies,  caused  a  boom 
in  tin-mining  company  shares  on  the  London  Stock  Exchange, 
and  stimulated  the  launching  of  sundry  swindling  projects.  On 
the  strength  of  showings  made  by  sound  companies,  promoters 
who  held  nothing  more  than  imaginary  claims  poured  forth 
stock  issues  and  honeyed  prospectuses.  "All  sorts  of  schemes  are 
being  propounded  for  the  exploiting  of  the  public  interest  in 
these  mines,"  warned  "The  Economist,"  of  London,  on  March 
2,  1912.  "The  shares  of  new  companies  are  introduced  almost 
every  day  to  the  Stock  Exchange,  and  at  prices  arbitrarily  fixed 
by  the  sellers,  who  hope  to  unload  on  the  public.  ...  It  may 
be  mentioned  that  the  majority  of  prices  in  the  Nigerian  tin 
[stock]  market  appearing  in  some  newspapers  are  paid  for  by 
those  interested."  Fraudulent  companies  pocketed  their  loot 
and  then  nimbly  vanished.  But  the  substantial  Nigerian  tin- 
mining  companies  were  a  source  of  continuing  wealth  to  British 
investors,  and  paid  dividends  reaching  30  per  cent. 

Now  came  Britain's  turn  to  face  charges  of  atrocities  com- 
mitted by  one  of  its  corporations,  the  Peruvian  Amazon  Com- 
pany, on  Indians  in  the  Putumayo  Region  in  the  upper  Amazon 
River  basin  in  South  America.  The  great  basin  of  the  Amazon 
provided  nearly  one-half  of  the  world's  supply  of  rubber.  In 
South  American  countries  many  corporations,  largely  British, 
had  entrenched  themselves,  drawing  immense  wealth  not  only 
from  rubber,  oil,  minerals  and  other  abounding  resources,  but 
from  utility  and  merchandising  enterprises  in  the  cities.9  Profit 
possibilities  in  the  respective  fields  were  carefully  calculated. 
Imports  and  exports  of  South  American  republics  exceeded 
$1,200,000,000  in  1905. 

In  the  rubber  industry,  in  South  America  and  elsewhere,  a 
huge  amount  of  British  capital  was  invested.  Speculative  crazes 


264  AMERICA  STRIKES  BACK 

in  stocks  of  rubber  companies  ran  epidemic  in  Britain.  "The 
whole  of  society,  from  one  end  of  the  scale  to  the  other,  has  gone 
rubber  mad,"  recounted  an  editorial  in  "The  Economist,"  on 
April  23,  1910.  "The  needy  peer,  who  is  known  to  have  but- 
tressed his  family  misfortunes  since  the  end  of  February,  has 
engaged  in  the  game  with  the  same  zest  as  the  commissaire  who 
made  fourteen  pounds  out  of  nothing  in  a  week.  .  .  .  We  can- 
not be  sure  that  the  rubber  gamble  is  by  any  means  over.  A 
craze  it  may  be,  but  people  on  the  whole  have  made  money  and 
want  to  make  more.  New  [stock]  issues  continue  to  pour  out 
at  a  rapid  rate,  and  are  accorded  favorable  receptions  by  the 
public." 

An  outgrowth  of  a  Peru  firm,  the  Peruvian  Amazon  Com- 
pany was  registered  in  1908  as  a  British  corporation  with  head- 
quarters in  London.  It  was  run  by  a  composite  board  of  di- 
rectors of  whom  four  were  British,  and  it  had  a  nominal  capital 
of  £1,000,000.  Its  area  in  the  Putumayo  district  was  about 
10,000  to  12,000  square  miles,  somewhat  larger  than  the  size 
of  Massachusetts  and  Rhode  Island.  Three  South  American 
newspapers  in  1907  exposed  the  company's  treatment  of  the 
Indians,  and  in  the  same  year  an  American  Consul  in  Peru  sent 
to  Washington  a  report,  "Slavery  in  Peru,"  which,  however,  was 
not  printed  until  six  years  later  when  the  House  of  Repre- 
sentatives published  it  as  a  document.  In  England  the  facts 
were  first  made  public  by  a  series  of  articles  in  1909,  in  the 
weekly  journal  "Truth." 

The  resulting  great  commotion  caused  the  British  Foreign 
Office,  in  1910,  to  send  Sir  Roger  Casement  to  the  Putumayo 
district  to  make  inquiry.  His  report  fully  supported  the  charges. 
In  the  next  year  the  Peruvian  Government  commissioned  Judge 
Romolo  Paredes  to  investigate;  his  report  confirmed  the  atroci- 
ties. The  House  of  Commons  then  appointed  a  Select  Com- 
mittee, which,  after  collating  a  mass  of  evidence,  reported  in 
March,  1913,  these  findings: 

The  company  had  a  force  of  1,500  whites  (whom  it  termed 
"armed  vigilantes")  equipped  with  Winchester  guns  which 
were  fast  being  replaced  by  modern  automatic  guns.  "Commis- 
sions" or  patrols  of  these  men  searched  a  region  and  collected 
Indians.  Natives  who  ran  away  were  ruthlessly  shot  down, 


RUBBER  MADNESS  AND  WORLD  TRADE     265 

while  those  seized  were  listed  as  "conquered,"  and  were  put  to 
the  task  of  gathering  the  wild  rubber  of  the  forest.  "These  man- 
hunts are  simple  slave  raiding/'  the  Committee  commented.  Of 
60,000  or  70,000  Indians  in  the  Putumayo  district,  more  than 
half  were  reduced  to  slavery.  Torturing  and  the  burning  of 
men  and  women  alive  with  kerosene  oil  were  two  of  the  ter- 
rorizing methods.  "However  great,"  the  Committee  stated, 
"may  be  the  reluctance  to  credit  the  possibility  of  diabolical 
brutalities  of  this  kind,  the  truth  of  the  burning  alive  of  Indians 
is  too  well  established  by  the  evidence  of  eye  witnesses." 

At  the  same  time,  to  give  the  slavery  of  Indians  the  color  of 
legality,  an  accompanying  system  was  enforced.  "Advances 
('pages' )  of  European  goods  were  made  to  them,  and  they  were 
then  regarded  as  debtors  to  the  company,  and  forced  under  pain 
of  merciless  flogging  to  work  off  their  debts  in  rubber.  Thence- 
forth they  were  held  under  the  chain  of  peonage,  a  system  of 
debt  bondage  from  which  they  never  got  free.  ...  If  they  ran 
away,  they  were  hunted  down  by  bodies  of  armed  men  and 
brought  back;  and  it  appears  that  the  Peruvian  law  would 
sanction  the  handing  over  of  such  debtors  to  their  employers." 
Elsewhere  in  the  report  the  company's  armed  force  was  de- 
scribed as  "in  fact,  a  gang  of  ruffians  and  murderers,  who  shot 
from  mere  lust  of  blood,  or  burnt,  tortured  and  violated  in  a 
spirit  of  wanton  deviltry  ...  for  which  each  was  paid  £5  a 
month.  The  outrages  on  the  Putumayo  were  carried  to  an  in- 
human extreme,  which,  if  it  had  not  been  proved  up  to  the  hilt, 
would  have  seemed  incredible." 

The  Committee  related  how  a  board  of  directors  in  London 
nominally  professed  to  supervise  the  operations  of  rubber 
production  thousands  of  miles  away  in  the  depths  of  the  Ama- 
zon forest.  One  of  the  British  directors,  H.  M.  Read,  was  mana- 
ger of  the  London  Bank  of  Mexico,  and  also  a  director  of  the 
Peruvian  Corporation,  Limited,  a  concern  with  large  nitrate, 
railway  and  land  interests  in  Peru.  Read  had  never  been  in  the 
Putumayo  district,  but  he  admitted  having  seen  Indians  shot 
down  in  the  city  of  Lima,  and  that  he  had  done  nothing;  "it 
never  crossed  Read's  mind  to  inquire  into  the  treatment  of 
Indians  at  all."  A  second  British  director  was  J.  Russell  Gub- 
bins,  who  sold  goods  in  Peru  but  had  never  seen  the  Putumayo. 


266  AMERICA  STRIKES  BACK 

Another  of  the  directors  was  Sir  John  Lister  Kaye;  he  knew  noth- 
ing of  Peru  or  rubber,  and  he  "repudiated  the  duty  of  inquiring 
into  labor  conditions."  This  picture  of  the  directors'  room  in 
London  was  drawn  by  the  Committee:  "A  photograph  of  the 
wild,  naked  forest  Indians  whom  they  employed  hung  on  the 
walls  of  their  Board  room,  and  there  was  a  list  hanging  in  the 
room  of  the  Indians  working  in  the  sections.  But  no  dicussion 
ever  took  place  at  Board  meetings  about  the  labor  question  or 
the  treatment  of  labor." 

In  conclusion,  the  Committee  declared  that  the  brutal  and 
murderous  treatment  of  Indians  was  not  confined  to  the  Putu- 
mayo  district.  "It  appears,  rather,  that  the  Putumayo  case  is 
but  a  shockingly  bad  instance  of  conditions  of  treatment  that 
are  liable  to  be  found  over  a  wide  area  in  South  America."  The 
same  statement,  based  upon  the  evidence,  was  made  in  the 
course  of  ensuing  debates  in  Parliament.  And  apart  from  the 
treatment  of  Indians,  rival  rubber  companies  in  the  Amazon 
basin  carried  on  backwoods  fighting  in  which  even  white  non- 
participants  were  killed.10 

After  these  disclosures,  the  British  High  Court  compelled 
the  dissolving  of  the  Peruvian  Amazon  Company. 

The  stenographic  reports  of  the  annual  meetings  of  stock- 
holders in  London  rubber  companies  do  not  show  a  solitary  in- 
stance where  any  question  was  raised  as  to  conditions  of  labor. 
Profits  engrossed  attention.  Enormous  were  the  dividends  dis- 
tributed by  British  rubber  companies  operating  in  various  parts 
of  the  world.  After  the  first  three  years  of  its  existence,  which 
was  a  preparatory  period,  the  Consolidated  Malay  Rubber 
Estates,  Limited,  paid  annual  dividends  averaging  89  per  cent 
for  the  three  succeeding  years.11  At  the  stockholders'  yearly 
meeting  in  London,  in  1913,  the  chairman  announced — as 
though  a  considerable  sacrifice  were  being  imposed — that  the 
dividend  would  have  to  be  lowered  to  75  per  cent,  one  reason 
for  which  step  was  the  increase  in  capital  stock.12  An  audience 
of  delighted  stockholders  of  the  Pataling  Rubber  Estates  Syn- 
dicate, Limited,  at  a  meeting  in  London,  shouted  a  heartfelt 
"Hear,  hear"  when  the  chairman  congratulated  them  on  their 
highly  satisfactory  profits,  justifying  for  the  year  1912  a  munifi- 
cent dividend  of  275  per  cent,  less  income  tax.  During  eight 


RUBBER  MADNESS  AND  WORLD  TRADE     267 

years,  the  assemblage  was  reminded,  the  Pataling  Syndicate 
had  proved  itself  a  peerless  money-maker  by  its  distribution 
of  1,115  per  cent  in  dividends — an  average  of  140  per  cent  a 
year.  "I  think,"  the  chairman  crowed,  "that  you  will  agree  with 
me  that  this  is  a  record  of  which  we  may  well  be  proud.'7  The 
stockholders  demonstrated  their  approval  by  applause.13 

These,  but  a  few  of  many  instances,  show  why  the  British 
public  was  so  eager  to  buy  rubber  company  stocks.  Seeing 
which  opportunity,  squads  of  American  promoters  of  dubious 
rubber  companies  in  Mexico  (where  cultivation  of  the  product 
had  not  been  any  too  successful,  financially),  shifted  their 
stock-selling  activities  to  London.  A  further  reason  was  that 
the  American  Government  had  prohibited  them  the  use  of  the 
mails. 

Wherever  money  was  to  be  made,  at  the  turn  of  the  present 
century,  companies  were  busy  developing,  exploiting  and  op- 
pressing. The  scope  of  the  great  American  corporations  lay 
mainly  in  America,  which  in  general  afforded  them  sufficient 
resources  and  adequate  outlet.  Of  the  world's  copper  produc- 
tion in  1904,  approximately  1,200,000  pounds,  American  cop- 
per companies  produced  less  than  half.  The  most  formidable 
rival  of  American  copper  producers  was  a  British  company 
headed  by  the  Rothschilds,  that  owned  the  Rio  Tinto  Mines  in 
Spain — the  largest  and  richest  group  of  mineral  properties  in 
the  world.14  The  American  Sugar  Refining  Company  (the 
Sugar  Trust)  was  originally  content  with  its  American  plants, 
only  later  establishing  itself  in  Cuba.  Much  the  same  was  the 
status  of  the  congeries  of  corporations  embraced  in  the  Tobacco 
Trust.  The  Standard  Oil  Company  derived  its  supplies  chiefly 
from  American  fields.  Most  of  the  plants  of  the  American  Smelt- 
ing and  Refining  Company  were  in  America,  supplemented  by 
holdings  of  large  mining  and  smelting  interests  in  Mexico  and 
South  America. 

Considerable  as  they  were  in  other  countries,  American 
investments  were  far  outdistanced  by  British.  Great  Britain's 
invested  capital  abroad  was  so  gigantic  that,  of  Britain's  total 
national  income  of  about  £2,000,000,000,  the  minimum  known 
yearly  net  income  from  foreign  investments  and  businesses  in 
other  lands  was  estimated  at  £140,000,000,  and  it  was  impos- 


268  AMERICA  STRIKES  BACK 

sible  to  measure  the  full  sum  with  any  exactitude.  The  English 
financial  authorities,  Professor  A.  L.  Bowley  and  Sir  Josiah 
Stamp,  figured  the  return  at  a  higher  amount. 

As  an  example  of  the  wealth  drained  from  the  world  supply 
by  some  other  European  countries,  Holland's  Asiatic  posses- 
sions will  serve.  The  Dutch  East  Indies  (officially  termed 
Netherland  Indies  since  1934),  comprised  Java,  Madura, 
Borneo,  Celebes,  part  of  New  Guinea  and  the  Molucca  Is- 
lands. The  area  of  the  whole  was  733,642  square  miles,  or 
about  one-fourth  that  of  the  United  States  of  America,  and  the 
population  40,000,000.  Holland's  people  were  heavily  taxed  for 
naval  and  military  forces  in  the  Dutch  East  Indies;  but  the 
many  corporations — Dutch,  British  and  other — thriving  in 
those  colonies  waxed  fat  on  the  profitable  returns  of  heavy 
capitalization.  The  Trading  Company  of  Amsterdam,  owning 
thirty-six,  or  one-fifth,  of  the  sugar  plantations  in  the  Dutch 
East  Indies,  reached  the  point  where  in  the  variety  of  its 
operations  it  employed  more  than  1,000  Europeans  and  150,000 
Asiatics,  and  enriched  stockholders  by  a  30  per  cent  dividend 
on  its  common  stock. 

In  Dutch  East  Indies'  rubber  plantations  the  amount  of 
Dutch,  British  and  other  capital  invested  was  computed  at  an 
amount  equal  to  perhaps  $200,000,000.  Only  the  mining  of 
tin,  of  which  one-fourth  of  the  world's  supply  came  from  the 
Dutch  East  Indies,  was  reserved  as  a  Government  monopoly. 
Nearly  the  whole  of  the  world  consumption  of  pepper  and 
quinine,  and  large  supplies  of  tea  and  copra,  came  from  the 
Dutch  East  Indies.  Exports  of  petroleum  became  important. 
Coal  deposits  in  Sumatra  produced  increasingly  heavy  outputs 
— there  were  undeveloped  resources  of  gold,  silver  and  copper, 
and  rich  iron  mines  in  the  Celebes.  The  production  of  palm  oil 
increased  to  an  extent  threatening  close  rivalry  with  Africa. 
But  this  situation  was  later  met  by  the  fraternizing  of  British 
and  Dutch  interests  in  a  colossal  octopus  interlocking  of  soap 
and  margarine  companies  that  controlled  all  stages  of  produc- 
tion from  raw  material  to  the  retailing  of  manufactured  goods. 
For  a  puny  country  about  the  size  of  Massachusetts  and  Con- 
necticut, and  with  a  population  of  less  than  5,000,000,  Holland 
was — or  at  least  its  possessing  classes  were — well  fortified  with 


RUBBER  MADNESS  AND  WORLD  TRADE     269 

wealth,  the  estimated  total  of  which  (in  1906)  was  $4,400,000,- 
000. 

Materialism  of  the  most  strenuous  type  was  now  being  ex- 
hibited in  another  part  of  the  world.  In  general,  the  people  of 
Occidental  countries  had  an  illusory  idea  of  Japan.  Superficial 
and  sentimental  writers  of  other  nations,  visiting  that  country, 
went  to  find  a  colorful  atmosphere.  They  confined  their  gaze  to 
the  surviving  quaintness  of  dress,  queer  customs  and  unique 
ceremonies,  the  whole  of  which  made  an  interesting  contrast 
with  the  drab  industrialism  of  Western  countries.  On  this 
representation  they  lavished  an  artistry  of  words.  But  all  of 
this  was  an  idyl  of  the  old  Japan,  and  not  a  portrayal  of 
the  new. 

Influenced  by  the  progress  and  power  of  Western  material- 
ism, Japan,  before  the  advent  of  the  nineteenth  century's  last 
quarter,  had  emerged  from  its  centuries-old  seclusion.  Once  it 
had  determined  upon  its  course,  Japan  pursued  it  with  a  fervor 
verging  upon  fanaticism.  From  America  and  Europe  it  copied 
industrial,  financial  and  transportation  systems.  While  exotic 
writers  were  absorbed  in  romanticizing  over  bits  of  antique 
Japan,  the  practical  Japanese  leaders  were  exulting  over  the 
nascent  Japan  of  factories,  banks  and  transportation  lines. 
Japan's  government  applied  itself  as  a  business  to  co-operating 
with  capitalists  in  promoting  industrialization.  Officials  con- 
centrated upon  the  imbuing  of  an  industrial  temper  among  the 
people;  and  to  provide  a  plenitude  of  factory  labor,  the  State 
conducted  training  courses  for  women.  Japan's  factory  owners 
then  had  at  their  disposal  a  submissive  army  of  workers,  toil- 
ing variously  from  eleven  to  seventeen  hours  a  day;  twelve 
hours  were  the  standard  in  cotton  mills.  The  wages  were  scant, 
men  textile  workers  receiving  thirty  sen  (thirty  cents),  and 
women  twenty  sen  a  day.  In  match  and  other  factories  women 
were  paid  twelve  to  twenty  sen  a  day.  The  daily  pay  of  skilled 
machinists  was  somewhat  more  than  one  yen  (about  fifty 
cents).15 

The  wealth  rapidly  amassed  by  Japanese  industrialists 
from  cheap  labor  was  augmented  by  their  piratical  methods  in 
appropriating  trade-marks  of  European  and  American  manu- 


270  AMERICA  STRIKES  BACK 

facturers.  Almost  every  well-known  foreign  label  was  closely 
imitated  on  Japanese  goods,  which  were  sold  throughout  the 
Far  East  as  the  genuine  make  of  European  or  American  manu- 
facturers. The  owners  of  the  trade-marks  found  themselves 
virtually  helpless.  When  they  sought  redress  in  the  Japanese 
courts,  it  was  repeatedly  decided  there  that  no  suit  could  be 
maintained  unless  the  imitation  were  identical,  in  every  dot  and 
dash,  with  the  original:  complete  identity  and  not  similarity 
was  juridically  declared  the  one  and  only  proof  of  piracy.  In  his 
"Conclusions"  in  the  book  compiled  by  him  on  Japan,  Count 
Shigenobu  Okuma,  for  a  time  Japan's  Prime  Minister  and  Min- 
ister for  Foreign  Affairs,  could  not  avoid  confessing:  "It  must 
be  admitted  that  [the  Japanese]  people  in  general  are  neither 
over-particular  nor  profound  in  their  ideas  of  business  moral- 
ity." 16  Evidently  swayed  by  the  continued  protests  of  foreign 
manufacturers  and  by  storms  of  foreign  denunciation,  the 
Japanese  Vice-Minister  of  Agriculture  and  Commerce  made  a 
circular  appeal  to  chambers  of  commerce  in  Japan.  Ascribing  the 
theft  of  inventions  and  trade-marks  by  Japanese  manufacturers 
and  merchants  to  the  growing  intensity  of  competition,  he 
hoped  the  practice  would  be  supplanted  by  the  use  of  "hon- 
orable means."  17 

Speculative  crazes  of  the  most  approved  Western  type  were 
enacted  in  Japan.  One  such  occasion  was  after  Japan's  victory 
in  the  war  with  China  in  1894,  when  the  receipt  of  a  large 
indemnity  and  the  glamor  of  triumph  caused  a  general  in- 
toxication which  quickly  transmitted  itself  to  the  business  and 
financial  fields.  The  desire  for  wealth,  already  strong  among 
certain  classes,  now  became  widespread,  and  groups  of  op- 
timistic or  unscrupulous  promoters  lost  no  time  in  purveying  to 
the  passion.  Many  projects  were  put  forward,  reckless  in  them- 
selves but  made  plausible  by  misrepresentation.  "The  people 
in  general,"  wrote  a  high  Japanese  financier,  "thinking  that  to 
form  a  company,  whatever  its  object  might  be,  meant  to  realize 
an  enormous  profit,  competed  to  subscribe  to  shares  of  new 
companies,  and  numbers  of  bubble  concerns,  whose  accounts  of 
profit  and  loss  were  never  reliable,  saw  the  light."  A  similar 
phantasmagoria  followed  the  Russo-Japanese  war  in  1906,  when 
the  Japanese,  heady  with  victory,  plunged  into  the  wildest 


RUBBER  MADNESS  AND  WORLD  TRADE     271 

speculative  excesses.  "The  mania,"  related  the  same  authority, 
"was  indescribable,  for  it  is  shown  by  aggregate  statistics  that 
the  aggregate  capital  of  the  new  companies,  together  with  the 
increased  capital  of  the  old  ones,  was  in  that  year  estimated  at 
over  1,600,000,000  yen."  The  inescapable  crash  caused  wide 
wreckage,  shattering  a  string  of  weak  banks.18 

The  political  morality  of  Japan  was  as  low  as  its  commercial 
and  financial  practices.  Elections  were  corrupt  and  so  was  the 
Diet,  Japan's  Parliament.  The  worst  of  American  election 
methods  were  borrowed  and  exceeded.  Through  political  ma- 
chines and  bosses,  corporations  in  America,  as  we  have  noted, 
regularly  corrupted;  but  the  American  Government  did  not 
itself  bribe  voters  to  perpetuate  partisan  power  or  to  ensure  a 
majority  in  Congress  for  its  measures.  In  Japan  the  Govern- 
ment itself  resorted  to  wholesale  corruption,  notably  in  1898- 
1899,  when  it  took  this  means  for  securing  in  the  House  of  Rep- 
resentatives a  majority  for  its  bill  to  increase  taxes.  The 
resultant  agitation  caused  the  enacting,  two  years  later,  of 
a  drastic  Corrupt  Practices  Act,  but  despite  this  law  corruption 
went  on,  although  covertly  engineered.  Political  "rings"  and 
bosses  became  rooted  in  Japan;  the  word  politician  was  in 
disrepute  among  many  of  its  people;  and  distrust  of  elective 
officials  was  reflected  in  the  growing  indifference  or  apathy  of 
large  bodies  of  voters  in  Parliamentary  elections.19  Again  and 
again  came  exposures  of  the  corruption  of  leading  Government 
officials,  or  their  implication  in  shady  financial  transactions — a 
line  of  sensational  exposures  that  extends  practically  to  the 
time  of  this  writing.20 

In  the  deceptive  years,  with  their  peace  illusions,  imme- 
diately preceding  the  World  War,  American  materialism  was 
as  much  as  ever  the  object  of  attack  by  European  writers. 
Among  them  were  Germans  like  Professor  Hugo  Miinsterberg 
who,  while  drawing  a  salary  from  an  American  university, 
wrote  caustic  articles  on  America  for  German  papers. 

By  the  instructive  lessons  of  competition,  however,  Britain's 
business  men  had  been  taught  the  true  character  of  modern 
Germany.  Commercially,  Germany  had  grown  so  fast  that, 
beginning  in  1870  with  an  unimportant  merchant  marine,  its 


272  AMERICA  STRIKES  BACK 

steamship  fleets  had  increased  to  millions  of  tonnage,  exceeded 
only  by  that  of  Britain  and  America.  (In  point  of  tonnage  en- 
gaged in  overseas  trade,  Germany  far  outranked  America,  the 
bulk  of  whose  shipping  was  in  the  coasting  trade  and  on  the 
Great  Lakes.)  Co-ordinating  its  system,  Germany  had  or- 
ganized shipping,  industries  and  trade  to  work  in  efficient 
unison,  and  each  contributed  to  the  development  of  the  others. 
The  volume  of  Germany's  industrial  production  was  sub- 
ordinate only  to  that  of  America  and  Britain.  To  such  an  extent 
had  German  business  prospered  that  before  the  World  War 
Germany  was  clustered  with  millionaires,  some  15,000,  each  of 
several  hundred  of  whom  could  boast  of  possessing  10,000,000 
marks.  If,  compared  to  the  American  dollar  millionaire,  the 
German  mark  millionaire  seemed  on  a  lower  financial  plane, 
his  status  was  proportionately  high  when  measured  by  German 
standards. 

One  of  the  few  British  writers  to  gauge  the  significance  of 
Germany's  position  was  William  Harbutt  Dawson.  He  had 
written  many  books  on  that  country  and  understood  the  force 
of  events  there.  Recognizing  the  sway  of  the  legend  that  rep- 
resented Germany  as  an  ideological  nation  of  thinkers,  poets 
and  dreamers,  he  sought  to  show  the  actualities  of  Germany's 
modern  development.  His  book  was  not,  he  wrote,  intended  as 
either  a  glorification  or  a  disparagement.  It  aimed,  rather,  to 
present  the  Germans  in  their  real  character  as  an  avid  trading 
nation.  "The  furor  Teutonicus  of  old  has  its  modern  counterpart 
in  an  ardor  Teutonicus  whose  object  is  material  wealth."  He 
proceeded  with  his  exposition  of  Germany's  intense  materialism 
as  shown  not  only  by  "its  exaltation  of  machinery  and  systems" 
but  also  by  its  "force  worship"  and  by  its  "fondness  for  mas- 
siveness,  its  reckless  hankering  after  great  effects."  21 

If  Germany's  industrialism  was  to  be  thus  exposed  as  the 
acme  of  materialism,  how  were  Britain's  own  conditions  to  be 
described?  Perhaps  in  Dawson's  eyes  British  industrialism,  by 
reason  of  its  much  longer  existence,  had  become  a  thing  of 
usage  and  respectability.  Certainly,  were  cold  figures  consulted, 
Britain  outclassed  Germany.  The  gross  value  of  Germany's 
industrial  production  (estimated  in  dollars)  was  computed  at 
less  than  $3,000,000,000,  exceeding  France's  by  $650,000,000. 


RUBBER  MADNESS  AND  WORLD  TRADE     273 

Britain's  industrial  output  reached  $4,100,000,000,  secondary 
only  to  the  $7,000,000,000  of  expansive  America.  England's 
financial  and  commercial  organs  rejoiced  over  the  increase  in 
Britain's  trade.  To  that  country,  so  dependent  upon  the  rev- 
enues from  goods  sold  abroad,  figures  were  not  arid.  And  in  a 
country,  too,  whose  statesmen,  publicists  and  business  men 
were  not  prone  to  rhetorical  flights,  figures  were  closely  studied 
and  effectively  cited.  From  1909  to  the  end  of  1913  the  volume 
of  exports  had  risen  from  £377,000,000  to  £525,000,000,  a  gain 
of  £148,000,000.  "Trade  throughout  the  country  has  enjoyed 
the  greatest  boom  in  recent  English  history;  profits  have  been 
high,"  recounted  "The  Economist,"  of  London,  on  January  17, 
1914.  A  few  months  later  it  estimated  Britain's  annual  income 
from  trade,  investments  and  other  sources  at  the  magnificent 
sum  of  more  than  £2,000,000,000. 

Yet  notoriously  formal  and  reserved  as  were  the  English,  they 
— or  at  least  the  extensive  groups  of  stockholders — were  elec- 
trified into  emotional  response  whenever  they  heard  the  an- 
nouncement of  high  dividends.  To  this  manifestation  we  have 
already  referred,  and  unavoidably  we  shall  have  to  do  so  again. 
High  dividends  were  so  much  the  custom  that  any  lapse  here 
or  there  caused  pained  astonishment.  American  boasting  was 
still  made  a  matter  of  reproach  by  British  writers,  yet  it  is 
doubtful  whether  the  head  of  any  American  corporation  could 
have  contrived  to  beat  the  solemn  flaunting  common  in  Eng- 
land. For  example,  pointing  to  the  forty-two  year  money- 
making  career  of  the  company  bearing  his  name,  Sir  John 
Barker  addressed  stockholders:  "To  sum  up,  it  is  no  little 
satisfaction  to  share  in  an  enterprise  which  has  such  a  record 
of  upward  growth — it  is,  indeed,  a  pleasure  to  be  associated 
with  a  business  whose  elasticity  and  management  ensure  a  safe 
dividend  of  eleven  and  a  half  per  cent  on  the  ordinary  shares." 
At  which  there  was  a  salvo  of  applause.22  Examples  more  or 
less  similar  abounded.  As  for  the  multitude  of  British  com- 
panies operating  in  other  countries,  their  large  annual  dividends 
were  a  commonplace,  yet  each  time  declared  they  drew  fresh 
applause.  Two  of  many  instances  of  these  dividends  were  the 
National  Bank  of  India  paying  its  regular  dividend  of  12  per 
cent  (on  increased  stock  to  boot),  and  the  Chartered  Bank  of 


274  AMERICA  STRIKES  BACK 

India,  Australia  and  China  with  its  15  per  cent  dividend,  free  of 
income  tax.23 

In  a  powerful  letter  published  in  "The  Saturday  Review,"  of 
London,  on  September  22,  1917,  W.  R.  Lawson,  a  prominent 
English  financial  writer,  concluded:  "What  not  only  the  Bank 
of  England  but  our  whole  banking  system  needs  is  more  day- 
light both  from  within  and  without."  To  which  "The  Satur- 
day Review"  responded  editorially:  "We  quite  agree."  But,  of 
course,  no  investigation  was  made. 

Meanwhile,  there  had  been  made  in  America  an  unsparing 
investigation  into  the  power  and  acts  of  the  great  financial 
magnates,  and  of  the  powerful  banks  and  other  interests  con- 
trolled by  them.  A  House  of  Representatives  resolution  in- 
troduced by  Congressman  Pujo  in  1912  directed  the  Com- 
mittee on  Banking  and  Currency  in  that  body  to  investigate 
banking  and  currency  conditions  in  the  United  States  as  a  basis 
for  remedial  legislation.  There  was  reason  to  believe,  the  resolu- 
tion set  forth,  that  a  few  groups  of  financiers  in  New  York  and 
elsewhere  concentrated  in  their  hold  the  management  and  re- 
sources of  the  great  industrial  and  railroad  corporations  of  the 
country.  Leading  bankers  and  other  multimillionaires  such  as 
J.  Pierpont  Morgan,  Jacob  H.  Schiff,  George  F.  Baker,  and 
Thomas  F.  Ryan  were  summoned  before  the  Pujo  Committee 
and  rigorously  interrogated.  The  dictatorial  power  of  a  small 
group  of  mighty  banks  in  controlling  the  arteries  of  money  and 
determining  credit;  the  interlocking  of  a  maze  of  corporation 
directorates;  the  domineering  power  of  clearing  house  associa- 
tions; subtle  stock  exchange  operations  and  practices, — all 
these  were  exposed  to  the  glare  of  publicity.  In  its  report  the 
committee  gave  the  credit  usually  bestowed  upon  these  inner 
groups  of  bankers  for  their  function  in  building  up  America's 
huge  industries.  But  these  considerations,  it  adjudged,  did  not 
justify  those  bankers  in  taking  control  of  the  resources  of 
America's  financial  institutions,  or  of  the  people's  savings,  or 
levying  tribute  upon  every  large  enterprise,  or  dictating  com- 
mercial credits  and  dominating  stock  exchange  values.24 

A  little  later  came  the  equally  sensational  report  of  an  in- 
vestigation by  the  Interstate  Commerce  Commission  into  the 
financial  transactions  of  the  New  York,  New  Haven  &  Hart- 


RUBBER  MADNESS  AND  WORLD  TRADE     275 

ford  Railroad  Company,  controlled  mainly  by  J.  Pierpont  Mor- 
gan and  by  John  D.  Rockefeller.  In  the  process  of  securing  a 
monopoly  by  acquisition  of  other  lines,  this  company  had  paid 
exorbitant  sums — in  one  case  double  the  real  value.  It  manipu- 
lated its  securities  in  the  stock  market,  and  unloaded  stock 
upon  the  public.  "A  corrupt  monopoly,"  the  report  termed  the 
company;  and  its  directors  were  branded  as  "criminally  neg- 
ligent." 25  American  magnates,  however  they  might  escape 
law's  penalties,  could  not  shield  themselves  from  probing  as 
could  their  European  compeers. 


CHAPTER   XX 
ARMAMENTS  AND  PROFITEERING 

BEFORE  America  entered  the  World  War  in  1917,  European 
criticisms  were  twofold.  British  and  French  critics  bitterly  re- 
proached America  for  making  money  from  Europe's  tragedy; 
and  the  German  Government  formally  protested  to  Washing- 
ton against  American  corporations  supplying  war  material  to 
the  Allies.  When  had  European  corporations,  including  the 
German,  not  profited  from  selling  material  to  nations  at  war? 
That  time  never  was. 

Manifestly,  American  corporations  were  making  extraor- 
dinary profits.  High  in  the  list  was  the  United  States  Steel 
Corporation.  Profits,  called  earnings,  on  its  $500,000,000  of 
common  stock  rose  from  11  per  cent  in  1913  to  48.46  per  cent 
in  1916  and  to  39.15  per  cent  in  1917.  During  the  same  time 
its  profits  on  preferred  stock  increased  from  22.54  to  75.37  per 
cent.  Even  after  payment  of  Federal  income  and  excess  profit 
taxes,  the  United  States  Steel  Corporation  had,  in  1917,  a  net 
income  of  $244,738,908  remaining  from  its  total  revenue  of 
more  than  $478,000,000.  But  were  the  beneficiaries  Americans 
only?  By  no  means.  Before  the  World  War  $70,000,000  of  the 
stock  had  been  owned  by  Europeans,  mainly  in  England  and 
Holland.  At  the  war's  outbreak  $20,000,000  of  this  stock  had 
been  sold.  But  in  1916  there  was  still  owned  abroad  nearly 
700,000  shares,  355,000  of  which  were  held  in  England  and 
238,000  in  Holland. 

The  Bethlehem  Steel  Company's  profits  were  such  that  in 
1916  a  dividend  of  $22.50  a  share  was  declared  on  its  common 
stock,  and  in  1917,  $23.50,  supplemented  by  a  grand  distribution 
of  a  200  per  cent  stock  dividend.  The  effect  upon  speculation 
was  seen  in  the  soaring  of  Bethlehem  Steel  Company  stock  from 
a  point  considered  high  at  46%  in  1914  to  a  climax  of  700  in 
1916,  when  the  company's  earnings  towered  to  286  per  cent. 
From  the  World  War's  start  American  manufacturers  of  ex- 

276 


ARMAMENTS  AND  PROFITEERING  277 

plosives  made  such  great  profits  that  the  regular  and  extra 
dividends  of  I.  E.  du  Pont  de  Nemours  Company  jumped  from 
$30  per  share  of  common  stock  to  $100  in  1916,  sagging  to  $51 
in  1917.  In  four  years  of  peace  time  the  du  Fonts  had  made 
$4,000,000  in  profits,  but  during  an  equal  number  of  war  years 
their  profits  ascended  to  $24,000,000.  Thus,  in  1934,  declared 
Senator  Gerald  P.  Nye,  chairman  of  the  United  States  Senate 
Special  Committee  investigating  the  munitions  industry. 

Testimony  before  that  committee  showed  that  du  Pont  World 
War  dividends  totaled  458  per  cent  of  the  par  value  of  the  com- 
pany's original  stock.  At  the  request  of  Senator  Nye,  Lammot 
du  Pont,  president  of  the  I.  E.  du  Pont  de  Nemours  Company, 
submitted,  on  November  18,  1934,  a  series  of  recommendations 
as  to  the  conduct  of  the  munitions  industry.  Senator  Nye  had 
advocated  a  96  to  98  per  cent  wartime  tax  on  all  incomes  ex- 
ceeding $10,000  a  year.  Du  Pont  agreed  that  excess  war  profits 
should  be  eliminated,  and  he  favored  immediate  action  by 
America  in  the  initiation  of  its  own  policy  in  placing  the  inter- 
national munitions  trade  under  strict  Governmental  control. 
Whether  or  not  these  unexceptionable  sentiments  will  be  con- 
verted into  action  we  shall  have  to  wait  and  see. 

Confident  predictions  about  how  the  martial  spirit  may  be 
curbed  are  notoriously  subject  to  correction  by  events.  In  the 
mid-nineteenth  century  there  was  published  "The  History  of 
Civilization  in  England,"  by  Henry  Thomas  Buckle.  This  book 
made  a  sensation  in  Europe  and  America,  and  raised  Buckle  to 
literary  fame.  It  was  his  avowed  belief  that  the  possibility  of 
wars  had  been  greatly  lessened  by:  New  gunpowder  inventions; 
modern  locomotion;  and  improved  knowledge  of  political  econ- 
omy. Confident  of  his  premises,  he  went  so  far  as  to  maintain 
that  he  did  not  think  his  conclusion  could  be  impugned.  Inter- 
vening wars  apart,  need  it  be  said  that  by  the  year  1914  war- 
fare's weapons  had  been  perfected  into  a  mechanism  of  de- 
structiveness  undreamt  of  by  Buckle?  Not  that  factor,  nor 
accelerated  transportation,  nor  any  understanding  of  greater 
economic  interdependence  prevented  the  holocaust  of  the 
World  War.  At  the  very  time  when  Buckle  was  penning  his 
speculations,  a  new  and  more  deadly  type  of  cannon  had  been 
invented  and  was  being  manufactured  in  England  itself. 


278  AMERICA  STRIKES  BACK 

In  all  European  countries,  belligerent  and  neutral,  the  World 
War  was  an  event  ensuring  to  the  business  classes  extraordinary 
money-making  opportunities.  While  Governments  involved  in 
the  war  were  appealing  to  their  peoples  for  the  highest  display 
of  patriotism  and  were  invoking  the  utmost  spirit  of  sacrifice, 
the  owners  of  industries  in  general,  of  banks  and  shipping, 
were  heaping  up  profits  that  often  surpassed  those  of  peace 
times.  Yearly  dividends  ran  from  IS  to  35  and  40  per  cent. 
Even  these  returns,  high  if  estimated  by  European  standards, 
did  not  denote  the  full  influx  of  profits  in  many  business  lines. 
Commonly,  liberal  portions  of  profits  were  set  aside  for  cash 
reserves,  for  depreciation  charges,  or  were  spent  in  plant  en- 
largements. 

But  the  activities  of  industry  in  general  never  reached  the 
depths  of  infamy  that  characterized  concerns  engaged  in  mak- 
ing and  marketing  armament,  munitions  and  other  war  material. 
Industries  which  did  not  expressly  benefit  from  supplying  naval 
and  military  equipment  were  in  nowise  concerned  in  peace 
times  with  engendering  war  fears.  Not  infrequently,  however, 
some  armament  and  munition  manufacturers  fomented  war 
alarms  to  stimulate  sales  of  their  death-dealing  wares.  From 
the  time  of  Napoleon  I  the  British  people  were  perturbed  by 
a  series  of  invasion  scares.  After  the  exhaustive  Napoleonic 
wars  the  Duke  of  Wellington  assured  his  country  of  the  im- 
probability of  war  for  a  long  time;  Europe's  devout  yearning, 
he  declared,  was  for  peace.  Nevertheless,  from  time  to  time, 
war  scares  were  disseminated.  In  a  quarter  of  a  century  fol- 
lowing the  Napoleonic  wars,  Britain  spent  at  least  £160,000,000 
on  fortifications  and  warships.  Perhaps  half  of  this  sum  repre- 
sented useful  and  unavoidable  services.  But  the  fact  did  remain 
that  many  of  the  ships  ordered  in  hysteria  were  left  to  rot  or 
were  soon  pronounced  obsolete,  to  be  displaced  by  others.  What 
proportions  of  these  older  scares  were  spontaneous,  and  what 
artfully  fostered,  cannot  be  measured  or  guessed.  But  certain  it 
is  that  the  war  scares  of  more  recent  decades  were  instigated  by 
particular  armament  and  munition  interests. 

Manifestly  the  creators  of  these  scares  took  every  precaution 
to  envelop  their  operations  hi  hermetic  secrecy.  But  disclosures 


ARMAMENTS  AND  PROFITEERING  279 

did  occasionally  come.  Two  instances  occurred  shortly  before 
the  World  War.  "Marz,"  the  leading  South  German  weekly 
review,  prominently  featured  in  April,  1912,  an  attack  by  Con- 
rad Haussman,  a  Progressive  member  of  the  Reichstag,  on  the 
methods  used  by  Admiral  von  Tirpitz,  head  of  the  German 
navy,  in  furtherance  of  propaganda  for  a  still  larger  navy. 
Scares  against  England,  Haussman  charged,  had  been  spread, 
and  the  money  for  systematic  propaganda  had  come  from  allied 
shipbuilding  and  armament  manufacturers.  Similar  charges 
against  a  German  gun  and  cartridge  company  were  made  a  year 
later  in  the  Reichstag  by  Karl  Liebknecht,  Socialist  leader,  who 
charged  that  attempts  had  been  made  to  put  propaganda  in  a 
French  paper  for  the  purpose  of  stirring  up  the  German  Gov- 
ernment, and  thereby  increasing  the  company's  business.  "If," 
editorially  declared  "The  Economist,"  of  London,  on  March 
11,  1911,  "the  history  of  our  naval  and  military  scares  be  care- 
fully examined,  it  would  be  found  that  they  are  largely  en- 
gineered from  the  dockyard  and  armament  constituencies.  .  .  . 
Certainly,  the  members  ought  not  to  be  allowed  to  tout  for 
contracts  in  Parliament  for  their  own  constituencies."  As  a 
matter  of  record,  a  sizable  number  of  members  of  Parliament 
were  directors  or  important  stockholders  in  armament  com- 
panies. In  that  very  year  the  Chamber  of  Deputies  in  France 
had  acted  to  end  a  long-prevailing  scandal.  To  a  bill  for  build- 
ing two  large  battleships  it  had  tacked  an  amendment  providing 
that  no  Government  order  be  given  to  any  firm  or  company 
which  included  among  its  directors  or  managers  any  Deputy  or 
Senator. 

The  second  count  against  the  armament  makers  was  that 
they  imposed  defective  or  otherwise  inferior  material  upon 
their  own  armies  and  navies,  as  well  as  upon  those  of  other 
countries.  How  ancient  were  these  practices  has  been  seen  by 
facts  given  in  earlier  parts  of  this  book.  In  modern  times  certain 
persons  in  Southern  European  countries  were  suspected  of 
spoliation  on  an  enormous  scale  in  war  contracts,  which  often 
additionally  brought  the  delivery  of  bad  material.  But  the  pro- 
tection officially  afforded  to  those  men  and  the  power  they 
wielded  gave  them  security. 


280  AMERICA  STRIKES  BACK 

Throughout  Europe  no  scandal  touching  defective  equipment 
was  allowed  to  be  publicly  aired.  In  America  facts  were  occa- 
sionally pried  out.  At  the  outbreak  of  the  Civil  War  European 
manufacturers  dumped  refuse  guns  in  America.  A  Congres- 
sional Committee,  in  1894,  had  reported  of  the  Carnegie  Steel 
Company  that:  "The  company  was  hired  to  make  the  best 
possible  armor  plate,  and  was  paid  an  enormous  price.  Resting 
under  these  obligations,  the  company  or  its  servants  per- 
petrated manifold  frauds,  the  natural  tendency  of  which  was  to 
palm  off  upon  the  Government  an  inferior  armor  whose  in- 
feriority might  perhaps  appear  only  in  the  shock  of  battle  and 
with  incalculable  damage  to  the  country."  And  according  to  an 
official  report,  the  Carnegie  Steel  Company  was  making  armor 
plate  at  a  cost  of  less  than  $200  a  ton,  which  plate  it  sold  to 
the  Russian  Government  at  $249  a  ton,  while  charging  the 
United  States  Government  from  $520  to  $700  a  ton  for  pre- 
cisely the  same  plate.1  The  complaint  said  to  have  been  made 
by  the  Spanish  Admiral  Cervera  after  the  American  squadron 
had  destroyed  his  fleet  at  Santiago  de  Cuba,  in  1898,  was  by  no 
means  proved,  yet  it  had  a  strain  familiar  to  all  acquainted 
with  ways  in  Southern  European  countries.  Cervera,  it  was 
reported,  uttered  a  grievance  to  the  effect  that  the  guns  he 
should  have  had  were  in  the  pockets  of  Spanish  contractors.  In 
the  German  Reichstag  Deputy  Erzberger,  at  a  later  time,  ex- 
posed the  profiteering  operations  of  German  armament  makers. 
If  honest  prices  were  charged,  he  declared,  the  cost  to  the  Ger- 
man Government  would  be  50  per  cent  less,  and  on  that  reduc- 
tion the  manufacturers  would  still  make  a  large  profit. 

What  may  ironically  be  described  as  a  cosmopolitanism  of 
interests  existed  among  munitions  and  armament  manufac- 
turers. Alfred  Nobel,  the  Swedish  manufacturer  of  dynamite, 
had  founded  in  England,  in  1871,  a  branch  called  the  Nobel 
Explosives  Company.  In  1887  there  was  organized  in  England 
the  Nobel  Dynamite  Trust,  Limited,  which  combined  in  itself 
the  Nobel  Explosives  Company  and  four  companies  in  Ger- 
many exchanging  shares  for  those  in  the  Nobel  Dynamite 
Trust,  which  further  acquired  large  interests  in  South  Africa, 
Canada  and  other  parts  of  the  world. 

During  the  World  War,  the  Nobel  Dynamite  Trust  found 


ARMAMENTS  AND  PROFITEERING          281 

itself  under  mandatory  need  of  detachment  from  German  in- 
terests. At  the  stockholders'  meeting  in  1915,  at  which  this 
move  was  announced,  Sir  Ralph  William  Anstruther,  the  com- 
pany's chairman,  reviewed  its  origin  and  went  on:  "That  is 
twenty-eight  years  ago,  and  during  that  period  the  German 
and  British  interests  have  worked  harmoniously  side  by  side 
for  the  common  good  of  the  shareholders."  2  And  at  the  stock- 
holders' meeting  in  1916,  Anstruther  told  how  the  company  had 
sold  its  German  assets  and  bought  all  interests  formerly  held 
by  Germans.  In  Britain  the  company  was  now  resolved  back 
into  the  Nobel  Explosives  Company.  "It  may  be  interesting 
here  to  recall,"  Anstruther  informed  stockholders,  "that  an 
original  investment  of  £100  in  the  1872  company  now  repre- 
sents a  capital  interest  in  this  company  of  £3,000  in  ordinary 
shares,  and  that  the  dividends  on  that  capital  investment  during 
the  forty-five  years  have  amounted  in  all  to  upwards  of  £8,500." 
Because  of  the  secrecy  imposed  by  war's  demands,  Anstruther 
said,  he  could  not  give  details  of  the  company's  present  and 
prospective  activity,  but  he  did  announce  a  10  per  cent  dividend 
and  a  bonus  of  5  per  cent  on  the  common  stock,  both  free  from 
income  tax.  Upon  which  J.  R.  Richmond,  a  large  stockholder, 
feelingly  said:  "We  should  accept  our  case  with  more  or  less 
silent  gratitude."  3  In  the  next  year  the  dividend  was  20  per 
cent,  inclusive  of  a  5  per  cent  bonus,  both  free  from  income 
tax.4 

The  career  of  the  Krupp  armament  company  in  Germany  is 
fairly  well  known.  Beginning  early  in  the  nineteenth  century 
with  a  mere  shed,  the  machinery  in  which  was  run  by  water- 
power  (unreliable  because  the  dam  froze  in  winter),  the  Krupp 
concern  gradually  evolved  into  a  huge  cannon  manufactory.  At 
a  time  when  war  between  Germany  and  France  seemed  in- 
evitable, Krupp's  works  were  delivering  the  newest  models  in 
cannon  to  the  Government  of  Emperor  Napoleon  III,  and  those 
cannon  were  used  to  mow  down  German  soldiers.  While  arma- 
ment companies  of  each  country  were  extolling  themselves  as 
the  great  sources  of  supply  for  patriotic  protection,  all  of  the  im- 
portant companies  in  many  countries  took  steps  to  form  a  com- 
munion of  interest.  In  the  United  Harvey  Steel  Company, 
registered  in  Britain  in  1901,  were  Krupp's  and  another  Ger- 


282  AMERICA  STRIKES  BACK 

man  firm,  and  large  Austrian,  British,  French  and  American 
armament  manufacturers.  This  organization  afforded  a  central 
meeting  ground  for  the  world's  armament  makers.  But  as  it  was 
too  open  to  the  dangers  of  attack,  it  later  voluntarily  dissolved.5 
Many  of  the  Krupp  patents,  especially  for  armor  plate,  were 
bought  by  British  armament  firms,  and  were  constantly  used 
in  the  making  of  battleships  for  the  British  navy. 

Sensational  disclosures  were  made  in  the  German  Reichstag 
on  April  18,  1913,  by  Dr.  Liebknecht  whose  constituency  was 
Essen,  where  the  Krupp  works  were  located.  The  Krupp  com- 
pany, he  charged,  had  maintained  in  Berlin  an  agent  (the  name 
was  given),  whose  business  it  was  to  bribe  officials  in  the  War 
and  Navy  Departments  to  communicate  to  him  documents  con- 
taining military  secrets.  "Armament  contractors,"  Liebknecht 
said,  "systematically  supply  goods  to  foreign  countries,  indif- 
ferent as  to  whether  they  will  later  be  used  for  the  purpose  of 
killing  Germans."  Although  accusing  Liebknecht  of  exaggera- 
tion, General  von  Heeringen,  Minister  of  War,  had  to  admit 
that  some  truth  lay  in  his  charges.  Later  in  the  "Grenzboten," 
an  old-fashioned,  conservative  German  weekly  review,  Herr 
Cleinow,  the  editor,  wrote  that  it  was  foolish  to  dismiss  the 
charges  as  mere  Socialist  agitation;  corruption  in  political  cir- 
cles was  well  known,  and  there  could  be  no  denial  of  the  cor- 
ruption of  certain  army  officers.  Repeatedly,  though,  the  Krupp 
company  watered  its  stock,  and  on  this  paid  large  dividends. 

Armament  profits  in  Germany  may  be  judged  from  the  re- 
ports of  the  Deutsche  Waffen-  und  Munitionsfabriken,  which 
had  an  ammunition  factory  at  Karlsruhe  and  armament  works 
at  Martinikenfeld.  Before  the  World  War  this  company  was 
affiliated  with  similar  companies  in  Belgium,  France  and  Italy. 
Starting  with  a  capital  in  marks  equivalent  to  $1,500,000,  the 
company  doubled  its  capital  in  1896,  and  raised  it  in  1899  to  a 
sum  in  marks  equal  to  $3,750,000.  This  was  doubled  again  in 
1912.  From  1893  onwards  dividends  steadily  rose  from  15  per 
cent  to  the  point  where  they  reached  32  per  cent  in  the  years  be- 
fore the  World  War.  But  even  these  high  dividends  on  masses 
of  watered  stock  gave  no  proper  idea  of  the  full  profits,  for 
large  amounts  of  these  were  deposited  in  the  company's  treasury 
as  reserves. 


ARMAMENTS  AND  PROFITEERING  283 

The  Armstrong  works  in  England  had  been  founded  by  Wil- 
liam George  Armstrong,  an  attorney  by  profession  but  actually 
interested  in  mechanical  and  scientific  matters.  He  originally 
built  the  works  for  the  marketing  of  a  hydraulic  crane  of  his 
invention.  Then,  turning  his  attention  to  artillery,  in  1855  he 
produced  the  modern  rifled  gun  that  we  have  already  referred 
to.  For  a  time  the  British  Government  slighted  the  importance 
of  this  new  implement,  but  other  Governments  gave  large  orders 
to  Armstrong.  He  was  knighted  in  1859.  Twenty-seven  years 
later  he  was  raised  to  the  peerage,  as  was,  in  1903,  his  grand- 
nephew  and  heir  of  the  same  surname. 

Branching  to  a  foreign  country,  the  Armstrong  works  estab- 
lished a  cannon  factory  at  Puzzuoli,  Italy.  At  a  time  when  Italy 
was  rated  by  Britain  in  the  class  of  its  naval  competitors,  this 
was  the  situation  as  authoritatively  set  forth:  "The  Italian 
Government  has  no  gun  or  torpedo  factory  of  its  own  for  the 
Navy.  Both  guns  and  torpedoes  of  every  description  or  service 
are  furnished  by  two  private  concerns.  Lord  Armstrong's  gun 
factory  at  Puzzuoli,  near  Naples,  provides  the  fleet  with  large 
guns,  as  well  as  with  secondary  and  quick-firing  ordnance.  The 
torpedoes  (called  in  Italian  siluri),  are  made  in  Swarzkopf's 
torpedo  factory  at  Venice."  6 

An  incident  embarrassing  to  British  naval  officials  occurred 
in  the  House  of  Commons  in  April,  1911.  One  of  the  House 
members — Kellaway — drew  attention  to  the  official  statement 
that  the  Armstrong  works  (the  exact  name  was  Armstrong, 
Whitworth  and  Company),  had  bid  a  price  of  £51  a  ton  for  the 
building  of  two  dreadnaught  battleships  for  Turkey,  whereas 
the  price  to  be  paid  by  the  British  Government  for  the  same 
class  of  ships  was  £63  a  ton.  The  Secretary  to  the  Admiralty 
glided  over  the  issue  by  replying  that  the  figure  for  the  British 
dreadnaught  was  considerably  less  than  £63  per  ton,  but  he 
would  not  say  it  was  less  than  £51  per  ton,  as  he  did  not  know 
on  what  basis  the  Turkish  figures  were  calculated.  Shortly  after, 
Sir  William  Bull  inquired  whether  "the  difference  is  due  to  a 
combine  amongst  the  English  makers  of  armored  plate?"  This 
question  brought  the  vague  but  significant  enough  answer  that 
the  navy's  policy  "restricted  the  area  of  competition."  But,  the 
Secretary  to  the  Admiralty  claimed,  "the  Navy  had  been  able 


284  AMERICA  STRIKES  BACK 

to  make  substantial  reductions  in  armor  plate  within  a  few 
years."  7  He  was  not  asked  what  they  were,  nor  what  were  the 
sums  formerly  paid.  As  for  the  armament  companies,  no  in- 
formation could  be  wrested  from  them;  on  their  dealings  with 
their  own  Government  or  with  any  other  they  were  obdurately 
mute. 

There  was  frequent  public  agitation  in  Britain  over  high 
Government  dignitaries  who  left  posts  in  the  naval,  ordnance 
and  construction  departments  to  join  the  board  of  directors  of 
armament  companies.  When,  on  December  31,  1912,  it  was 
announced  that  Sir  William  E.  Smith,  long  a  Government 
Director  of  Naval  Construction  and  also  Superintendent  of 
Construction  Accounts  and  Contracts,  had  consented  to  join 
the  Armstrong  company,  "The  Daily  Chronicle"  of  London 
took  critical  notice.  Giving  a  list  of  such  Government  officials 
who  had  gone  over  to  the  armament  companies,  it  observed: 
"The  drain  of  State  officials  into  the  service  of  armament  com- 
panies has  of  late  attracted  considerable  attention."  More  ex- 
pressive was  "The  Economist."  "Public  officials,"  it  objected 
editorially,  on  January  4,  1913,  "ought  not  to  join  private  firms 
with  a  view  to  securing  public  contracts;  officials  intimate  with 
the  secrets  of  the  Admiralty,  War  Office  and  Imperial  Defence 
Committee  ought  not  to  be  allowed  to  place  their  knowledge  at 
the  disposal  of  private  firms  which  manufacture  battleships  for 
the  Governments  of  foreign  nations  with  which  we  might  some 
day  be  unhappily  at  war."  In  two  months  came  another  an- 
nouncement. Sir  George  H.  Murray  who,  for  nineteen  years  had 
been  Secretary  to  the  Treasury,  retiring  in  1911,  and  Rear- 
Admiral  Sir  Charles  Ottley,  serving  in  the  highly  confidential 
office  of  Secretary  to  the  Imperial  Council  of  Defence,  were 
elected  directors  of  the  Armstrong  company.  "The  Morning 
Post,"  of  London  admonished  all  concerned  that  to  hold  public 
confidence  the  Treasury  should  be  above  any  color  of  personal 
connection  with  Government  contractors.  These  shifts  of  of- 
ficials to  armament  companies,  other  London  newspapers  stated, 
caused  general  public  uneasiness. 

Another  big  British  armament  company,  Vickers,  Limited, 
constantly  enlarged  its  sphere.  A  circular,  issued  by  it  to  stock- 
holders, on  March  8,  1913,  gave  notification  of  an  increase  of 


ARMAMENTS  AND  PROFITEERING  285 

capital  by  740,000  shares,  an  action,  it  was  explained,  neces- 
sitated by  the  great  expansion  of  the  company's  business.  The 
company,  stockholders  were  informed,  had  acquired  a  large 
interest  in  ordnance  works  in  Japan  and  in  other  countries. 

Less  than  a  year  later  there  burst  a  great  scandal  in  Japan 
over  battle-cruiser  contracts.  When,  in  1913,  Admiral  Count 
Gombei  Yamamoto  was  called  on  to  form  a  Cabinet,  a  leading 
Japanese  newspaper  editorially  made  the  sardonic  prognosis: 
"Now  that  Gombei  is  Premier  we  shall  see  some  big  Navy 
contracts."  Popular  feeling  ran  high  against  heavy  expenditures 
already  incurred  for  armaments.  Attacks  upon  the  Government 
in  the  Diet,  in  January,  1914,  were  soon  followed  by  dis- 
closures of  widespread  bribery  associated  with  the  contract  for 
the  battle-cruiser  Kongo,  built  by  the  large  Mitsui  shipbuilding 
company  in  which  Vickers  was  powerful.  Anger  over  these  and 
other  bribery  charges  led  to  popular  demonstrations  in  several 
cities.  In  Hibiya  Park,  in  the  center  of  Tokio,  40,000  persons 
assembled  to  denounce  navy  corruption.  The  police  were  power- 
less to  quell  the  disorder,  and  regular  troops  were  ordered  out 
to  disperse  the  crowds.  Yamamoto  and  his  Cabinet  resigned  in 
March,  1914,  and  two  months  later  a  navy  court  martial  swiftly 
acted.  For  his  part  in  the  transactions  attending  the  building  of 
the  Kongo,  Vice-Admiral  Matsumoto  was  weighted  with  a  fine 
of  409,800  yen  (about  $200,000)  and  was  sentenced  to  three 
years  in  prison.  Captain  Sawasaki  was  mulcted  11,500  yen  and 
received  a  one-year  prison  term.  Quickly  followed  judgment  by 
the  civil  courts  which  decreed  punishment  of  fines  and  prison 
for  certain  Mitsui  company  directors  and  other  officials  con- 
victed of  having  bribed  naval  officers  to  obtain  the  Kongo  con- 
tract. The  heaviest  sentence  meted  was  that  to  Admiral  Terugoro 
Fujii — four  years  in  prison  and  a  fine  of  368,360.05  yen.  Fines 
imposed,  it  was  thought,  represented  the  exact  amount  of  loot 
individually  pocketed. 

An  account  of  this  episode,  by  Oland  D.  Russell,  was  pub- 
lished in  "The  New  York  Times"  on  September  30,  1929,  and 
was  thus  retrospectively  called  forth  by  a  current  scandal  impli- 
cating several  American  shipbuilding  companies.  With  the  aim 
to  limit  armaments,  a  convocation  of  representatives  of  leading 
nations  had  deliberated  at  Geneva,  Switzerland.  At  this  con- 


286  AMERICA  STRIKES  BACK 

ference  William  B.  Shearer,  an  American  propagandist,  was 
active  in  seeking  to  prevent  a  reduction  of  American  war  ves- 
sels, and  if  possible,  to  bring  about  an  enlargement  of  the  Ameri- 
can fleet.  Disclosures  showed  that  his  salary  and  expenses  were 
paid  by  three  large  shipbuilding  companies,  all  of  which  held 
contracts  to  build  new  cruisers.  These  companies  became  dis- 
satisfied with  his  services.  He  brought  suit  in  the  Supreme 
Court,  in  New  York  City,  against  the  Bethlehem  Steel  Com- 
pany, the  Newport  News  Shipbuilding  &  Dry  Dock  Company, 
and  the  American  Brown  Boveri  Electric  Corporation.  His 
action  was  for  sums  alleged  to  be  due  for  services  at  Washing- 
ton, Geneva  and  New  York  City.  The  agreed  and  reasonable 
value  of  his  services,  he  contended,  was  $250,000;  he  had  spent 
$58,885  in  his  mission;  and  he  complained  of  having  been  paid 
only  $51,230. 

The  Naval  Committee  of  the  United  States  Senate  at  once 
set  about  investigating.  Before  its  sub-committee  Shearer  re- 
peated these  claims,  and  officials  of  shipbuilding  companies  ad- 
mitted that  he  had  received  $50,000  or  thereabouts.  In  Shearer's 
own  testimony  there  was  one  part  which  was  mentioned  in- 
cidentally, but  which  had  an  ominous  significance.  According  to 
his  statement,  the  Council  of  American  Shipbuilders  considered 
that  the  pacifist  influence  in  America  had  become  too  great,  and 
so  had  hired  Ivy  L.  Lee  to  counteract  it,  paying  him  $150,000 
for  services  in  spreading  publicity.8  Lee  had  begun  his  career 
as  a  press  agent  many  years  previously  under  the  patronage  of 
the  Rockefellers  and  various  large  American  corporations.  His 
business  was  to  prepare  and  send  to  newspapers  and  other 
publications  and  to  a  large  list  of  public  persons  matter  favor- 
able to  his  clients.  In  time,  several  foreign  Governments  used 
his  services.  Strong  is  the  temptation  to  give  here  some  adequate 
treatment  of  the  systematic  campaigns  carried  on  in  America 
by  multimillionaires  and  corporations  to  modify  and  otherwise 
shape  public  opinion.  Enormous  sums  were  thus  spent  in  issuing 
for  consumption  a  miscellany  of  skilful  publicity  the  sources  of 
which  were  generally  unsuspected.  But  we  must  not  be  deflected 
to  a  monograph  on  this  subject,  which  would  require  whole 
chapters.  Suffice  it  here  to  say  that  Lee's  connections  were  once 
thoroughly  investigated  by  a  Federal  investigating  Commission, 


ARMAMENTS  AND  PROFITEERING          287 

and  he  who  is  curious  may  find  ample  particulars  in  its  report.9 
But  to  return  to  the  purview  of  British  armament  companies: 
All — Vickers  one  of  the  foremost — were  large  exporters  of  war 
implements.  These,  irrespective  of  the  possible  outbreak  of 
international  complications,  were  sold  indiscriminately  wherever 
payment  was  tendered.  A  striking  instance  of  this  widespread 
traffic  was  bruited  in  the  House  of  Commons  in  1913.  Captain 
A.  C.  Murray,  a  member,  asked  Colonel  J.  E.  B.  Seely,  Secre- 
tary of  War,  whether  he  had  any  information  pertaining  to  the 
adoption  by  any  of  the  great  European  Powers  of  the  new 
Vickers  rifle-calibre  machine  gun.  Seely  replied  that  he  under- 
stood that  this  pattern  of  gun  had  been,  or  was  being,  supplied 
to  certain  of  these  Powers.  Captain  Murray:  "What  are  those 
Powers?"  Seely  took  refuge  in  the  reply  that  he  thought  he 
knew,  but  would  rather  not  say  without  notice.  Again,  a  few 
days  later,  Murray  importuned  for  the  names  of  the  customer 
Powers.  Seely  thus  disposed  of  the  query:  "There  is  no  official 
information  at  my  disposal  which  I  can  publish  on  the  sub- 
ject." 10  The  stark  way  in  which  questions  on  this  momentous 
matter  were  put  and  answered  in  the  British  Parliament  ex- 
posed either  the  disinclination  or  the  inability  to  vision  the 
consequences  of  arming  a  nation  which  tomorrow  might  be  an 
enemy.  And  this  eventuality  is  precisely  what  overtook  Britain 
when  British  guns  bought  by  Turkey  were  turned  against 
British  forces. 

The  World  War  did  impress  some  British  public  men  with 
the  need  of  arranging  a  measure  of  international  control  over 
the  manufacture  and  sale  of  arms.  When  Stanley  Baldwin  be- 
came Prime  Minister  he  broached  a  proposal  for  a  treaty  estab- 
lishing such  a  control,  but  he  could  not  muster  acceptance  of 
his  plan.  And  now,  many  years  later,  that  plan  with  amplifica- 
tion is  (at  this  writing)  being  formulated  by  the  American 
Government. 

Bishops,  peers  and  politicians,  an  eminent  assortment,  some 
revered  as  paragons  of  piety,  others  of  worldly  note,  and  all 
ranking  illustriously  as  "pillars  of  society,"  were  in  the  con- 
course of  armament  company  stockholders.11  Highly  did  they 
prize  shares  yielding  them  "handsome  dividends."  The  military 
outlook  for  Britain  in  the  opening  years  of  the  war  was  dark, 


288  AMERICA  STRIKES  BACK 

and  its  manhood  was  being  annihilated  by  the  myriads.  But  if 
reports  to  stockholders  are  any  criterion,  the  generality  of  lead- 
ing industrialists  were  intent  upon  thoughts  of  profits. 

On  a  larger  capital,  Knoch's  was  soon  able  to  pay  a  dividend 
and  bonus  equaling  20  per  cent,  free  of  income  tax.  From  a  2% 
per  cent  dividend  before  the  War,  Thornycroft's,  a  moderate- 
size  plant,  increased  its  distributed  profits  200  per  cent.  The 
Birmingham  Small  Arms  Company,  makers  of  rifles  and  Lewis 
guns,  wallowed  in  profits;  these  (and  they  were  net)  rose  from 
£190,000  in  1914  to  £408,000  in  1915,  and  to  somewhat  more 
in  each  of  the  years  up  to  1918;  besides  which,  the  company 
transferred  large  profit  sums  to  its  reserve  funds.12  Frequently, 
both  during  and  after  the  war,  complaints  were  made  in  London 
financial  publications  of  the  sketchiness  of  information  in  the 
Armstrong  company's  reports.  But  such  figures  as  the  company 
deigned  to  give  showed  a  greatly  ascending  scale  of  profits,  from 
not  quite  £600,000  in  1910  to  £1,055,620  in  1915,  and  £4,053,- 
605  in  the  three  years  1916-1919.  The  Armstrong  company's 
12 ^  per  cent  dividends  did  not  betoken  full  profits;  out  of 
these  £1,300,000  was  lodged  in  reserves,  and  plant  extensions 
were  also  built.  With  the  cessation  of  war,  Armstrong  divi- 
dends dropped  to  10,  then  to  5  per  cent.13  A  statement  issued 
to  stockholders  by  Vickers  after  the  war  admitted  profits  dur- 
ing four  years  of  £8,417,612  ($42,000,000).  This  sum  included 
dividends,  income  tax  paid  on  these  for  the  stockholders,  and 
an  amount  put  in  the  company's  reserve  funds.14  Embraced  in 
the  roster  of  Vickers'  stockholders  was  a  constellation  of  four 
dukes  and  marquesses,  seventy  other  titled  personages,  three 
members  of  the  House  of  Commons,  and  a  group  of  officials  and 
journalists.  Meantime,  while  lavishing  these  profits,  Vickers 
had  acquired  control  of  other  concerns  which  had  proved  them- 
selves most  attractive  money-makers.  Such  facts  regarding 
profits  as  came  to  public  knowledge  excited  rushing  specula- 
tion in  armament  and  munition  stocks — a  speculation  as  intense 
on  the  London  Stock  Exchange  as  on  the  Berlin  Bourse  or  on 
the  New  York  Stock  Exchange. 

There  was  in  England  an  old  company,  the  activities  of  which 
were  denoted  by  its  name — the  Metropolitan  Carriage,  Wagon 
&  Finance  Company,  commonly  abbreviated  as  the  Metro- 


ARMAMENTS  AND  PROFITEERING  289 

politan  Wagon  Company.  Midway  in  the  war,  strong  indica- 
tions of  its  great  profits  came  to  public  attention  when  a  few 
but  telling  lines  in  the  chairman's  report  showed  an  increase  of 
its  capital  stock  from  £1,000,000  to  £3,675,000,  and  the  use  of 
£1,424,712  as  part  of  the  plethora  of  undistributed  profits  and 
reserve  funds  for  this  expanded  capitalization.15  A  year  later 
came  further  impressive  news.  From  American  interests  the 
company  had  bought  control  of  the  British  Westinghouse  Com- 
pany for  entry  into  the  electrical  business;  it  had  embarked 
in  partnership  with  the  Birmingham  Small  Arms  Company;  it 
had  made  an  alliance  with  Vickers;  and  it  had  increased  its 
capital  to  £10,675,000  by  the  creation  of  seven  million  new 
shares  at  £1  each.16  A  later  announcement  by  the  Vickers  con- 
cern showed  that  the  Metropolitan  Wagon  Company  had  passed 
under  its  control. 

During  the  War  no  questions  were  asked  in  Parliament.  But 
in  1919,  in  the  House  of  Commons,  one  of  the  members — Rose 
— prodded  the  Government  official  in  charge  of  munitions  as 
to  the  contracts  which  this  company  had  obtained.  The  informa- 
tion was  now  elicited  that  it  had  been  awarded  orders  for  2,752 
armored  battlefield  tanks.  Rose  thereupon  pointed  out  how 
profits  from  the  company's  "fat  contracts"  had  enabled  it  to 
multiply  its  capitalization  and  soon  to  dispose  of  its  properties 
for  no  less  a  sum  than  £15,000,000.17  Military  tanks  hence- 
forth became  a  part  of  the  output  of  the  two  largest  armament 
concerns,  subsequently  combined  in  Vickers-Armstrong,  Lim- 
ited. Under  rules  formulated  by  the  Convention  for  Interna- 
tional Trade  in  Arms,  at  Geneva,  in  1925,  a  license  was  required 
from  the  Government  of  the  country  in  which  munitions  were 
made  for  their  sale  and  shipment  to  another  Government,  and 
the  transaction  had  to  be  reported  to  the  Secretariat  of  the 
League  of  Nations.  Such  a  license  was  issued  by  the  British 
Government  to  Armstrong- Vickers,  in  1931,  for  the  making 
and  shipment  to  the  Soviet  Government  of  Russia  of  one  hun- 
dred military  tanks.  The  reported  cost  was  $3,000,000. 

Although  during  the  World  War  critical  discussion  of  arma- 
ment matters  was  stilled  in  British,  French  and  other  European 
newspapers,  periodicals  and  representative  bodies,  there  had 
been,  as  we  have  seen,  some  share  previously.  Yet  in  all  of 


290  AMERICA  STRIKES  BACK 

it  the  name  and  deeds  of  an  individual  who  had  amassed  wealth 
from  international  traffic  in  armament  was  not  mentioned,  so 
well  did  he  screen  his  movements.  Basil  Zaharoff,  born  a  Greek, 
naturalized  as  a  Frenchman,  and  making  England  his  adopted 
country,  had  long  been  a  prime  character  behind  the  scenes. 
Warships  were  his  stock-in-trade.  So  successful  was  he  in  his 
ramification  of  operations  that  before  the  World  War  he  be- 
came a  masterful  power  in  Vickers,  as  he  later  did  in  Arm- 
strong's. "At  the  outbreak  of  the  World  War,"  asserts  Lehmann- 
Russblildt  in  his  book  "Die  Blutige  International"  published 
at  Hamburg  in  1929,  "he  was  master  of  the  combined  arma- 
ment industries  of  the  Entente."  Zaharoff  was  knighted  by  the 
King  of  England,  decorated  by  France  with  the  Grand  Cross 
of  the  Legion  of  Honor  for  "special  services,"  and  in  1924 
married  a  Spanish  duchess.  "He  is,"  commented  Lehmann- 
Russbuldt,  "one  of  the  wealthiest  men  in  the  world;  but  what 
seems  almost  incredible  is  that  up  to  a  year  or  so  ago,  Europe 
was  utterly  ignorant  of  the  machinations  and  maneuvers  of  this 
man.  .  .  ."  To  those  seeking  a  clarification  of  the  career  of  this 
"Man  of  Mystery,"  we  recommend  the  vivid  account  in 
Lehmann-Russbuldt's  book  of  which  an  English  translation, 
"War  for  Profits,"  was  brought  out  in  New  York  in  1930.18 

Since  that  volume  was  published,  supplementary  material 
was  disclosed  by  the  testimony,  in  1934,  before  the  United 
States  Special  Senate  Committee  investigating  the  munitions 
industry.  From  1919  to  1930,  Zaharoff,  the  facts  showed,  re- 
ceived as  world  agent  more  than  $2,000,000  in  commissions  from 
the  Electric  Boat  Company,  of  Groton,  Connecticut,  for  sales 
of  submarines.  Further,  a  close  agreement  was  shown  between 
the  Electric  Boat  Company  and  Vickers  to  dominate  the  sub- 
marine business  of  the  world.  Zaharoff,  the  Electric  Boat  Com- 
pany's president  testified,  had  told  him  that  he  was  a  stock- 
holder, although  not  under  his  own  name,  in  that  American 
corporation.  When  his  testimony  was  cabled  to  England,  the 
need  of  a  Royal  Commission  to  inquire  there  into  the  private 
manufacture  and  sale  of  arms  was  agitated  by  the  Labor  Party, 
with  Liberals  joining.  A  Royal  Commission  was  appointed,  and 
at  this  writing  is  still  taking  testimony.  At  a  hearing  in  Lon- 
don on  June  20,  1935,  Dr.  Christopher  Addison,  a  wartime 


ARMAMENTS  AND  PROFITEERING  291 

Minister  of  Munitions,  stated  that  nine  months  after  the  war 
had  begun  the  only  plant  that  delivered  according  to  its  promises 
was  the  national  arsenal  at  Woolwich.  "So  meagre  was  the 
allowance  of  ammunition  for  the  armies  in  France,"  he  said, 
"that  it  probably  is  no  exaggeration  to  say  that  defeat  was  only 
narrowly  averted  by  the  heroism  of  our  soldiers  who  were  at 
a  great  disadvantage  and  by  the  success  of  our  national  arsenal. 
I  know  of  no  case  in  history  where  a  great  industry  was  so 
disastrous  a  failure  in  time  of  need."  Previously,  however, 
Lloyd  George's  "War  Memoirs"  had  exposed  these  conditions. 

The  spectacle  of  a  spending  class,  surfeited  with  money,  was 
seen  in  British  and  other  European  cities  as  well  as  in  America 
during  the  World  War.  In  both  America  and  Britain  capitalist 
or  conservative  elements  sought  to  put  much  of  the  onus  of 
squandering  upon  the  well-paid  skilled  working  class.  Ignor- 
ing the  fact  that  the  rising  scale  of  living  costs  had  greatly 
neutralized  the  benefits  of  higher  wages,  these  commentators 
made  it  appear  that  workers  were  reveling  in  extravagance. 

In  America,  however,  conditions  differed  from  those  in 
Britain.  The  American  worker  was  used  to  a  better  standard 
of  living,  and  things  deemed  luxuries  in  Europe  did  not  seem 
so  to  him.  Also,  beginning  in  1902,  American  corporations  had 
systematically  set  out  to  dispose  of  a  considerable  segment  of 
their  stock  issues  by  selling  shares  to  workers.  And  during  the 
war  Liberty  Bonds  were  sold  direct  to  the  public.  A  great  deal 
of  American  savings  went  into  these  channels.  But  in  Britain 
the  old  "lofty  contempt  for  the  small  investor"  remained  and 
national  finances  there  were  administered  with  a  "supercilious- 
ness of  small  things."  The  British  editor  expressing  this  censure 
contrasted  such  an  attitude  with  the  situation  in  France.  "While 
every  scullion  and  chambermaid  knew  all  about  Rentes,  few 
British  workmen  ever  penetrated  into  the  arcana  of  Consols 
and  Local  Loans."  Consequently,  the  effects  of  neglecting  the 
British  small  investor  were  seen  in  his  using  his  money  in  the 
only  way  open  to  him,  that  of  buying  goods.19 

It  was  from  employers  and  stockholders  and  their  families 
that  the  splurging  in  Britain  came.  London  shops  catering 
largely  to  luxurious  tastes  did  an  immense  business  and  made 


292  AMERICA  STRIKES  BACK 

large  profits.20  Store  owners  were  in  a  state  of  "bursting  opu- 
lence"; despite  scarcity  of  gasoline  and  the  difficulty  of  getting 
an  automobile  license,  "so  many  ladies  are  still  gliding  about 
the  town  in  large  motor  cars";  old  habitues  of  fashionable  sea- 
side resorts  "complain  bitterly  of  being  pushed  out  by  the 
'new  rich'  who  are  spending  freely  the  spoils  of  war."  21 

The  enormous  number  of  rich  in  Britain  was  convincingly 
shown  by  the  Report  of  the  Inland  Revenue  Commission  for  the 
fiscal  year  1918-1919.  Notwithstanding  four  years  of  devastat- 
ing war  and  the  stupendous  financial  drain,  5,750,000  persons, 
in  a  total  population  of  47,000,000,  reported  their  taxable  in- 
come as  exceeding  the  vast  total  of  £2,000,000,000.  More  than 
two  million  persons  in  this  class  were  relieved,  by  abatements 
and  exemptions,  from  income  tax  payments.  The  war  resulted 
in  the  trebling  of  American  millionaires;  possessors  of  annual 
incomes  of  more  than  $100,000  rose  from  above  two  thousand 
to  nearly  seven  thousand  a  few  years  later;  the  number  of  ultra 
rich  having  annual  incomes  in  excess  of  $1,000,000  increased 
from  sixty  in  1914  to  more  than  two  hundred.  But  proportionate 
to  its  area  and  population,  Britain  could  claim  for  itself  a  re- 
markable showing  of  millionaires  and  multimillionaires. 

In  Britain  an  income  tantamount  to  $50,000  attested  a  solid 
millionaire  fortune,  on  the  basis  of  the  equivalence  of  that  sum 
to  a  five  per  cent  return  on  a  million  dollars.  And  in  actual 
cash-terms  Britain's  millionairedom  was  of  the  sterling  breed. 
Outstanding  in  the  list  were  two  hundred  and  five  notabilities 
each  with  a  yearly  income  above  £75,000  ($375,000  at  par 
exchange),  a  rate  of  income  classed  in  Britain  as  quite  regal. 
Ranged  below  that  superior  group  was  a  class  of  forty-eight 
thousand  other  persons  whose  income  graduated  from  £75,000 
to  £2,500  a  year.  The  fruits  of  more  than  one-tenth  of  the  na- 
tional production  was  taken  over  by  a  compact  group  of 
48,205  super  income-recipients  whose  aggregate  share  was 
£350,000,000.  The  portion  of  the  remaining  three  and  a  half 
million  income  taxpayers  amounted  only  to  £937,000,000.  Giv- 
ing a  glance  at  Germany,  there  we  note  a  plenitude  of  mark 
millionaires,  the  number  of  whom  was  reduced  by  post-war 
inflation  to  four  thousand,  but  (so  it  was  estimated)  was 
doubled  in  later  years.  For  the  "Fatherland"  whole  armies  had 


ARMAMENTS  AND  PROFITEERING  293 

perished;  the  big  German  land-owners,  bankers  and  industrial- 
ists experienced  the  least  affliction  from  war's  havoc  and  in- 
flation's ravages. 

Because  of  laws  decreeing  heavy  taxation  in  Britain,  the 
legend  was  spread  that  there  had  been  compelled  a  great  dis- 
gorging of  profits.  There,  however,  as  in  America  and  in  other 
countries,  income-tax  and  excess-profit  tax  statutes  were  much 
circumvented.  Many  British  corporations  seized  the  opportunity 
to  water  their  stock  and  also,  as  in  America,  they  diverted  funds 
to  uses  that  placed  them  beyond  the  reach  of  profit  taxation. 

In  every  country  the  most  outrageous  after-war  profiteering 
followed  that  of  the  war  itself.  Many  American  industrialists 
added  greater  sums  to  their  already  steep  profits.  According  to 
the  United  States  Bureau  of  Labor  Statistics,  the  general  in- 
creased cost  of  living  between  1914  and  1920  ran  from  95  to 
100  per  cent.  Wage  increases  usually  lagged  far  behind  price 
increases.  In  some  American  industries  profits  in  1919  fell 
below  those  of  1918,  but  in  the  textile,  clothing  and  dry  goods, 
sugar,  food  products,  petroleum,  building  material  and  sundry 
other  lines,  the  1919  profits  were  sensationally  more.  Public 
resentment  at  the  extortions  provoked  a  buyers'  strike  in  Amer- 
ica. Great  complaint  in  France  led  to  stormy  protests  in  the 
Chamber  of  Deputies,  on  July  18,  1919,  and  subsequently  to  a 
law  increasing  penalties.  To  prevent  profiteering  in  food  sup- 
plies, Britain  had  created  a  Food  Controller.  His  regulations 
were  evaded. 

Scandal  over  high  prices  and  large  profits  caused  the  House 
of  Commons  to  order  a  Select  Committee  investigation.  "Of 
course,"  Food  Controller  G.  H.  Roberts  testified,  "we  have  had 
experience  that  speculation  does  occur  as  soon  as  there  is  a 
shortage,  and  undue  profits  have  been  made  in  that  way."  22 
The  offhand  and  generalizing  manner  in  which  this  statement 
was  made  was  typical  of  the  superficial  character  of  the  in- 
vestigation. This  did  not  expose  the  identity  of  many  big  profit- 
eers, although  the  names  of  some  of  these  were  available,  having 
been  noted  in  British  publications.  When  an  anti-profiteering 
bill  was  being  steered  through  the  House  of  Commons,  the 
prediction  was  there  made  that  its  provisions  would  fall  upon 
the  little  profiteer,  but  would  not  deter  the  big  profiteer,  who 


294  AMERICA  STRIKES  BACK 

was  easily  able  to  pay  a  heavy  fine  and  continue  on  his  course.23 
British  estate  owners  whose  income,  derived  wholly  from  land 
holdings,  was  stationary  or  had  diminished,  bemoaned  their 
fate.  They  had  to  meet  an  onerous  taxation  which  they  could 
not  escape,  while  profiteering  cut  heavily  into  their  narrowing 
budget.  Bitter  were  their  complaints  of  the  prodigality  with 
which  some  classes  were  able  to  indulge  in  spending. 

Six  months  after  the  World  War's  end,  Alfred  Shortt,  a  Labor 
member  of  the  House  of  Commons,  thus  pictured  British  con- 
ditions: "The  war  has  brought  to  the  notice  of  the  people  of 
this  country  extraordinary  manifestations  of  wealth  of  which 
they  had  little  knowledge.  Great  reservoirs  of  apparently  hid- 
den wealth  have  been  disclosed,  and,  in  addition,  we  are  satisfied 
that  the  war  itself  has  led  to  a  vast  increase  in  the  private 
fortunes  of  individuals.  .  .  .  No  matter  where  one  turns  one 
finds  there  has  been  as  a  result  of  the  war  a  great  increase  in 
the  wealth  of  the  wealthy  classes  of  our  community."  In  con- 
trast, he  pointed  out,  great  masses  of  the  British  people  were 
forced  to  subsist  on  an  average  pittance  of  £1  a  week.24 


PART  FIVE 
THE  BUSINESS  OF  SCOFFING 


CHAPTER   XXI 
A  SERIES  OF  EXHIBITS 

"WE  have  been  too  often  supposed  to  have  been  devoted 
chiefly,  if  not  entirely,  to  material  enterprises.  We  have  been 
supposed,  in  the  common  phrase,  to  worship  the  almighty  dol- 
lar. We  have  accumulated  wealth,  sir,  we  have  devoted  our- 
selves to  material  enterprises  with  extraordinary  success,  but 
there  has  underlain  all  that,  all  the  time,  a  common  sense  of 
humanity  and  a  common  sympathy  with  the  high  principles  of 
justice.  ..."  The  world-wide  and  deep-seated  effects  of  the 
steady  campaigning  against  America  were  thus  acknowledged 
by  President  Woodrow  Wilson,  in  an  address  to  the  French 
Academy  of  Moral  and  Political  Sciences,  on  May  10,  1919. 
President  Wilson  could  well  have  dispensed  with  admissions 
and  extenuations  in  discoursing  to  a  Europe  large  sections  of 
which  had  long  been  and  were  then  surcharged  with  material- 
ism. 

True,  there  had  been  an  interval  during  the  World  War  when 
America  had  enjoyed  the  unprecedented  experience  of  hearing 
all  sorts  of  compliments  from  British  and  French  statesmen. 
To  Americans  this  ingratiating  propaganda  was  a  novelty;  but 
it  proved  to  have  been  only  a  preliminary  to  the  business  of 
inducing  good  will  and  war  support.  With  America's  entry  into 
the  war,  the  Allies  received  from  the  American  Government 
more  than  ten  billions  of  dollars  in  loans,  and  at  their  disposal 
was  placed  a  powerful  navy  and  an  army  exceeding  two  million 
men.  Then,  while  French  statesmen  glorified  America's  human- 
ity and  its  unbroken  and  traditional  friendship  for  France, 
British  statesmen  effusively  deplored  the  stupidity  of  George  III 
in  alienating  the  American  colonies — which  after  all,  they  said, 
had  been  composed  of  Englishmen  fighting  for  a  just  cause. 

But  after  the  war  America's  longanimity  was  soon  subjected 
to  a  resumption  of  the  old  attacks,  now  made  in  greater  force 

297 


298  AMERICA  STRIKES  BACK 

than  ever  by  one  group  after  another  of  European  writers. 
Philip  Gibbs,  for  example,  who  attained  note  as  a  novelist 
and  war  correspondent,  ridiculed  America  as  "a  nation  of  no- 
bodies." Americans  were  never  so  unpopular  in  Britain  as  at 
this  time,  Sir  H.  Perry  Robinson,  of  "The  London  Times," 
graciously  told  the  Council  of  Foreign  Relations  at  a  dinner  in 
New  York  City,  on  May  11,  1920.  One  reason  for  this  an- 
tagonistic feeling,  said  he,  was  because,  "You  are  beastly 
rich."  l  And  Margot  Asquith,  wife  of  the  former  Premier,  pertly 
wrote  of  Americans,  "They  would  rather  hear  themselves  abused 
than  undiscussed:  which  inclines  one  to  imagine  that  they  are 
suffering  from  the  uneasiness  of  the  nouveaux  riches"  She 
added  that  they  willingly  paid  their  dollars  to  hear  a  lecture 
criticizing  them,  but  balked  at  being  bored.2  And  now  came  the 
Earl  of  Birkenhead.  "Twenty-five  years  ago,"  he  recounted, 
"the  average  [American]  man  of  business  was  conceived  of,  and 
not  altogether  with  injustice,  as  one  who  left  home  early  and 
returned  late,  employing  the  long  day  in  the  feverish  interests 
of  Wall  Street;  he  became  dyspeptic  at  forty,  he  very  often 
died  at  fifty."  But  Birkenhead  professed  to  make  the  great  dis- 
covery that  American  dollar  madness  had  been  somewhat  modi- 
fied by — what?  The  game  of  golf!  "And,  at  last,  as  I  have 
already  pointed  out,  the  United  States  are  beginning  to  realize 
that  life  is  short,  health  vital,  dollars  incapable  of  transfer  to 
the  next  world."  8 

Every  era  contributes  its  serio-comic  performers  to  the 
world  stage,  in  literature  as  in  politics.  Thus  George  Bernard 
Shaw  had  contrived  to  win  an  international  and  long-continuing 
prestige  as  a  great  intellect  and  wit.  Shaw  had  never  acquainted 
himself  with  America,  but  for  decades  he  lost  no  occasion  to 
scoff  at  its  people.  Finally,  he  came  to  the  point  where  he  boasted 
of  his  consistent  policy  of  ridicule.  "I  myself,"  he  wrote  in  a 
leading  New  York  newspaper,  "have  been  particularly  careful 
never  to  say  a  civil  word  to  the  United  States.  I  have  scoffed 
at  their  inhabitants  as  a  nation  of  villagers.  I  have  defined  the 
100  per  cent  American  as  an  idiot.  And  they  just  adore 
me.  .  .  ."  Charles  Dickens,  he  went  on  to  assert,  had  won 
America's  people  "to  him  forever  by  merciless  projections  of 
Americans  as  windbags,  swindlers  and  assassins."  4 


A  SERIES  OF  EXHIBITS  299 

When  Shaw  did  at  last  briefly  visit  America,  in  1933,  he  ef- 
fectively exposed  himself.  The  occasion  was  a  long  address  in 
the  Metropolitan  Opera  House  in  New  York  City,  on  April  1 1 
of  that  year.  It  was  Shaw's  habit  to  deny  the  accuracy  of  inter- 
views imputed  to  him.  But  he  could  not  deny  the  accuracy  of 
this  address,  which  was  stenographically  reported  in  full.  In 
his  harangue  at  the  Metropolitan  Opera  House,  he  described 
the  American  Constitution  as  "a  charter  of  anarchism,"  and 
went  on:  "You  put  up  in  New  York  a  monstrous  idol  which  you 
call  'Liberty.'  And  there  it  is,  and  the  only  thing  that  remains 
to  complete  that  statue  is  to  put  on  its  pedestal  the  inscrip- 
tion, 'All  hope  abandon,  ye  who  enter  here.' ' 

Two  days  later,  under  the  caption  "A  Tragic  Comedian," 
"The  New  York  Times"  suggested  editorially:  "Mr.  Bernard 
Shaw  really  ought  to  write  a  play  about  himself.  .  .  .  Did  he 
not  in  'John  Bull's  Other  Island'  give  us  a  character  something 
like  his  own — a  man  discoursing  ignorantly  but  with  amazing 
confidence  and  cocksureness  about  everything  in  the  heavens 
above  and  the  earth  beneath?  .  .  ."  In  London  "The  Morn- 
ing Post"  editorialized:  "He  put  himself  on  as  a  farce  at  the 
Metropolitan  Opera  House,  revitalizing  that  building  as  the 
home  of  opera  bouffe." 

In  England,  meanwhile,  Frank  Harris  had  written  a  biogra- 
phy of  Shaw,  which  was  published  after  Harris'  death.  London 
newspaper  editors  were  shocked  when,  in  1931,  came  the  dis- 
closure that  Shaw  had  read  and  revised  the  proofs — although, 
he  declared,  he  had  left  intact  all  the  jibes  at  himself.  The  news 
of  Shaw's  collaboration  made  the  front  page  of  nearly  all  the 
London  newspapers.  "The  most  unpalatable  literary  sensation 
of  the  year,"  commented  "The  Daily  Mail,"  which  expressed 
surprise  that  a  man  of  Shaw's  age  and  "eminence"  should  have 
chosen  so  cheap  a  path  to  greater  notoriety.  In  his  book  Harris 
appraised  the  greatly  exaggerated  importance  in  which  Shaw 
was  held  by  the  world  and  by  himself.  "I  only  wish,"  Harris 
wrote,  "he  had  gone  to  jail  for  some  big  idea."  He  "insulted  his 
times  and  was  well  paid  for  it."  Evidently  Shaw  was  proud  of 
this  attribution.  In  a  letter  of  5,000  words,  published  in  1933 
as  a  Foreword  to  G.  H.  Thring's  book,  "The  Marketing  of 
Literary  Property,"  he  related  how  he  "liked  bargaining  for  its 


300  AMERICA  STRIKES  BACK 

own  sake,"  and  told  what  an  extraordinarily  good  bargainer  he 
had  been  in  dealing  with  publishers. 

While  Shaw  made  a  profession  of  mockery,  another  critic 
of  the  day,  William  Ralph  Inge,  Dean  of  St.  Paul's  Cathedral, 
London,  contrived  to  draw  upon  himself  the  appellation  of 
"the  Gloomy  Dean."  Inge's  book  "Outspoken  Essays"  and  his 
lectures  in  America  were  a  series  of  croakings;  democracy  was 
marked  "by  the  reckless  plunder  of  the  national  wealth,"  and 
was  impotent  against  "revolutionary  and  predatory  wealth." 
He  did  not  seem  to  know  of  the  long  course  of  plundering  done 
by  or  under  royal  and  caste  rulers — nor  how  incompetent  those 
rulers  had  shown  themselves  to  contend  with  revolutionary 
movements. 

With  variations  of  phrase,  the  Gloomy  Dean  was  only  re- 
peating the  stock  indictments  of  democracy  made  in  the  days 
of  his  great-great  grandfather.  However,  many  American  edi- 
tors overlooked  that  simple  fact.  For  example,  an  editorial  in 
"The  New  York  World"  of  May  3,  1925,  timorously  took  ex- 
ception to  Inge's  attacks  but  accepted  the  major  part  of  his 
assertions.  For  more  than  a  quarter  of  a  century,  the  editorial 
sought  to  explain,  Americans  had  been  increasingly  aware  of 
defects  in  the  practical  workings  of  democracy;  "a  critical 
temper  has  arisen  with  regard  to  the  abuses  it  permits — eco- 
nomic injustice,  monopoly,  official  corruption,  vulgarity,  intel- 
lectual mediocrity,  materialism."  That  pronouncement,  too,  as 
we  have  already  seen,  is  in  keeping  with  a  hoary  tradition. 
The  brashness  of  America's  foreign  critics  has  been  matched 
only  by  the  encouragement  it  has  received  from  timid — or  per- 
haps half -informed — American  intellectuals. 

Inge  was  one  of  the  leaders  among  Europeans  in  assailing 
America  as  a  Shylock  because  it  expected  payment  of  interest 
and  principal  on  its  war  loans.  Often  in  past  eras  had  British 
newspapers,  writers  and  public  men  bitterly  denounced  as  dis- 
honest any  country  which  could  not  pay  or  failed  to  pay  interest 
and  principal  due  to  British  lenders.  There  still  rankles  in 
England  a  burning  survival  of  resentment  from  the  time  of  the 
Civil  War  when  Confederate  bonds,  bought  as  prospective  rich 
investments,  turned  out  to  be  worthless.  And  to  this  day,  when 
Britain  and  other  leading  European  countries  are  in  default  to 


A  SERIES  OF  EXHIBITS  301 

America,  an  American  hears  Englishmen  indignantly  ask  why 
the  Government  of  the  United  States  does  not  redeem  Con- 
federate paper. 

Thus,  in  his  book  "England,"  did  Inge  deal  with  America: 
"If  the  British  flag  were  hauled  down  on  the  North  American 
continent,  it  is  more  than  probable  that  the  nations  of  Europe, 
enraged  by  the  bloated  prosperity  and  airs  of  superiority  of 
'the  man  who  won  the  war'  would  combine  to  draw  Shylock's 
teeth.  Great  Britain,  after  losing  Canada,  would  no  longer  have 
any  motive  to  help  a  nation  which  in  the  circumstances  would 
have  finally  forfeited  its  friendship."  Irresponsible  as  it  seemed, 
this  utterance  had  an  alarming  effect,  as  was  shown  by  the 
seriousness  with  which  it  was  taken  by  United  States  Senator 
Frederick  H.  Gillett  of  Massachusetts,  one  of  the  most  influ- 
ential of  Republican  Party  leaders.  Citing  in  the  United  States 
Senate  an  excerpt  from  Inge's  statement,  Gillett  used  it  as  an 
argument  for  the  passage  of  a  bill  providing  for  more  battle 
cruisers. 

"I  confess,"  he  said,  "to  more  sympathy  and  good  will  toward 
the  British  Empire  than  toward  any  other  nation."  But  the 
import  of  such  a  statement,  he  held,  must  be  recognized.  "When 
a  high  dignitary  of  the  English  Church  and  a  professional  fol- 
lower of  the  Prince  of  Peace  parades  such  provocative  and 
belligerent  sentiments,  we  can  hardly  rely  upon  the  pacific  and 
friendly  attitude  of  the  rest  of  the  European  people."  5  Inge  was 
not  an  exception  among  English  prelates,  however.  There  had 
been  published  a  report  of  a  sermon  delivered  on  October  11, 
1925,  by  the  Bishop  of  Durham.  "The  United  States,"  he  was 
reported  as  saying,  "is  at  once  the  most  criminal  and  wealthiest 
community  in  the  whole  civilized  world.  America  is  a  conspicu- 
ous illustration  of  the  folly  of  neglecting  the  moral  factor  in 
human  life."  6 

After  Inge's  statement  had  made  the  stir  in  the  United  States 
Senate,  thirteen  bishops  and  leading  clergymen  of  the  Church 
of  England,  realizing  the  mischief,  issued  a  disclaimer  stating 
that  Inge's  sentiments  did  not  represent  the  views  of  any  con- 
siderable number  of  Englishmen.  Unaffected  by  this  rebuke, 
Inge  continued  to  pour  out  articles  in  his  accustomed  manner 
and  to  market  them  to  influential  magazines. 


302  AMERICA  STRIKES  BACK 

In  agreeable  contrast,  there  were  at  this  time  two  British 
writers  who  left  at  home  whatever  preconceptions  they  may  have 
had  and  set  out  to  judge  America  fairly.  Both  John  Buchan  and 
J.  A.  Spender  were  discriminative.  Temperate  in  tone  and 
contents,  Spender's  book  in  particular  did  not  occupy  itself 
with  minutiae  or  superficialities.  In  "Through  English  Eyes" 
he  tried  to  include  the  whole  sweep  of  American  conditions; 
and  he  made  an  honest  effort  to  view  American  life  as  he  thought 
an  American  might  do.  He  deprecated  the  assurance,  reckless- 
ness and  snap  judgments  of  prejudiced  British  critics;  "it  fol- 
lows that  an  Englishman  who  goes  to  that  country  [America] 
with  the  idea  of  interpreting  its  life  in  terms  of  politics  is  in 
danger  of  going  very  much  astray."  He  might  advisedly  have 
extended  his  remark  to  include  critics  from  the  Continent  as 
well. 

Spender  was  one  of  but  two  or  three  in  the  long  critical  line 
to  admit  that  America  did  not  need  the  services  of  foreign 
detractors.  As  an  impressive  proof  of  this,  he  remarked  upon 
"the  stream  of  criticism  which  is  being  poured  out  by  the  most 
distinguished  American  writers  on  the  American  way  of  life." 

Observant  as  he  was,  Spender  failed  to  distinguish  between 
the  groups  applying  constructive  criticism  and  those  whose 
barkings  embodied  old  attitudes.  In  this  latter  group  Henry  L. 
Mencken  was  a  leader;  he  was  the  Joseph  Dennie  of  the  1920's. 
He  had  a  crowd  of  imitators,  and  the  "American  Mercury" 
magazine,  as  then  edited  by  him,  found  a  considerable  and 
highly  vocal  audience.  Although  some  articles  contributed  to 
this  magazine  had  value  in  calling  attention  to  matters  need- 
ing criticism,  the  general  tenor  of  his  expositions  was  character- 
ized by  jeering  at  democratic  society  and  the  influences  it  created. 
His  contention  then  was  that  the  average  man  in  a  democratic 
state  was  a  yokel;  he  was  most  happy  in  a  mob.  Mencken's 
"Notes  on  Democracy"  was  advertised  as  "a  devastating  po- 
lemic on  democratic  government  and  an  illuminating  analysis 
of  its  practice  in  America."  "Such  is  the  price  we  pay  for  the 
great  boon  of  democracy;  the  man  of  native  integrity  is  either 
banned  from  the  public  service  altogether,  or  subjected  to  ir- 
resistible temptations  after  he  gets  in  ...  Democratic  man 
hates  the  fellow  who  is  having  a  better  time  of  it  in  this  world. 


A  SERIES  OF  EXHIBITS  303 

Such,  indeed,  is  the  origin  of  democracy,  and  such  is  the  origin 
of  its  twin,  Puritanism."  These  were  a  few  of  Mencken's  many 
passages. 

But  here,  in  view  of  the  fact  that  Spender's  judiciousness  has 
seldom  been  matched,  it  might  be  well  to  suggest  that  among 
European  critics  the  habit  has  become  indurated  of  regarding 
American  vices  as  indigenous  and  American  virtues  as  im- 
ported. In  general,  those  critics  have  shown  themselves  unable 
to  recognize  American  self-criticism  when  they  see  it.  In  eco- 
nomics and  politics,  for  example,  they  have  chosen  to  interpret 
our  frank  and  open  inquiries  into  corruption  as  so  many  shame- 
less confessions  of  what — so  they  think — must  be  the  approved, 
general  and  daily  American  practice.  And  what,  then,  of  the 
arts?  There  the  European  critic,  who  has  imbibed  his  first  ideas 
of  America  from  the  disparaging  books  written  by  other  Euro- 
peans, is  prepared  to  accept  the  work  of  our  native  satirists 
as  full  and  rounded  representations  of  life  in  the  United  States. 

A  significant  instance  of  this  attitude  may  be  seen  in  some  of 
the  critical  responses  on  the  Continent  to  the  judgment  of  the 
Swedish  gentleman  who,  in  1930,  gave  the  Nobel  Prize  for 
literature  to  Sinclair  Lewis.  In  common  with  most  of  their 
American  brethren,  European  litterateurs  in  general  approved 
of  the  award — but  for  what  reason?  "Babbitt," — thus  wrote 
Andre  Levison  in  "Candide,"  a  Paris  literary  journal — "Bab- 
bitt is  a  symbol  of  the  average  American — 100  per  cent.  .  .  . 
Mr.  Lewis  shows  the  vacuity,  the  triviality,  the  flatness  of 
American  middle-class  life  in  America.  He  puts  to  shame  the 
agitated  sterility  of  dollar  chasing."  And  Carlo  Linati,  an  Ital- 
ian critic  of  some  repute,  was  moved  to  ask  why  Americans 
were  so  anxious  to  adopt  Europe's  scientific  discoveries  and 
systems  of  philosophy:  "Is  it  not  that  they  themselves,  in  spite 
of  all  their  materialism,  feel  that  they  cannot  live  without  an 
appearance  of  culture,  even  when  it  is  borrowed?" 

However,  in  spite  of  all  their  culture,  the  peoples  of  post- 
war Europe  could  not  live  without  the  fact  of  materialism, 
whether  borrowed  or  not.  While  the  operations  of  that  material- 
ism were  apparently  successful,  it  was  the  habit  of  most  foreign 
and  many  native  social  critics  to  lament  that  the  pressure  of 


304  AMERICA  STRIKES  BACK 

American  competition  had  corrupted  the  business  practices  of 
the  world.  Only  when  the  ventures  of  European  materialism 
conspicuously  failed  did  it  become  clear  that  ingenious  American 
capitalism  had  devised  no  process  of  control  through  holding 
companies,  no  promotion  scheme,  no  system  of  opening  foreign 
markets  to  increased  production  at  home,  that  Europe  had  not 
given  a  new  twist  to  in  the  borrowing. 

Some  crowned  kings  in  that  continent  had  been  dethroned; 
but  in  their  stead  had  arisen  industrial  kings  whose  sway,  not 
limited  to  one  nation,  was  outstretched  into  a  business  sover- 
eignty over  whole  groups  of  countries.  Manifestly,  we  are  not 
here  referring  to  corporations  and  Trusts  of  a  purely  national 
character,  but  to  the  mammoth  international  cartels,  combines 
and  Trusts  of  which  there  were  thirty-six.  Constructed  largely 
by  Fritz  Thyssen,  a  German  steel  manufacturer,  the  Interna- 
tional Steel  Entente  included  the  chief  producers  in  that  line  in 
eight  European  countries.  In  nine  lands  in  Europe  the  Bottle 
Manufacturers'  Cartel  lodged  itself.  Through  ten  European 
countries  spread  the  Electric  Bulb  Cartel,  with  its  hold  in  Japan 
also.  The  Superphosphate  Cartel  was  implanted  in  eleven 
European,  and  two  African,  countries,  and  the  Glue  Syndicate's 
domain  comprehended  eighteen  European  countries.  These  were 
some  of  the  huge  industrial  creations  variously  intent  upon 
harmony  of  interests,  price-fixing  agreements  and  control  of 
raw  material  and  finished  production.7 

In  the  list  of  these  international  organizations  was  the  Match 
Trust  directed  from  Sweden,  and  as  an  outgrowth  it  was  in 
Sweden  itself  that  the  most  colossal  business  swindler  of  cen- 
turies developed.  In  that  country  the  backwardness  of  its  busi- 
ness men  had  been  made  the  frequent  occasion  of  self-reproach. 
Although  Sweden,  so  it  was  said  there,  possessed  many  good 
technical  business  administrators,  they  were  routine  and  plod- 
ding compared  to  the  daring,  masterful  business  leaders  in 
other  lands,  notably  America.  Sweden  had  a  wide  range  of 
manufactures,  but  timber,  matches,  iron  and  pulp  were  its 
great  staple  industries.  The  corporations  that  controlled  these 
fattened  on  good  or  high  profits,  while  periodically  their  dis- 
satisfied workers  rebelled  in  bitter  and  often  prolonged  strikes. 
Waiving  account  of  such  conditions,  we  shall  restrict  ourselves 


A  SERIES  OF  EXHIBITS  305 

to  a  sketch  of  the  kind  of  outstanding  business  leader  Sweden 
did  finally  spawn  in  the  person  of  Ivar  Kreuger,  the  exposure 
of  whose  world-wide  plundering  came  only  two  years  after  the 
Swedish  award  of  the  Nobel  Prize  to  Sinclair  Lewis. 

A  small-town  man  born  in  1880,  Kreuger  had  been  supplied 
with  school  opportunities,  and  had  studied  at  the  Technical 
University  in  Stockholm  until  he  was  twenty  years  of  age. 
The  next  seven  years  he  spent  as  a  drifter  employed  in  other 
countries;  he  worked  for  a  New  York  City  real  estate  firm,  and 
had  jobs  on  railway  construction  in  Illinois  and  on  bridge  build- 
ing in  Mexico.  Next  he  located  in  Johannesburg  in  South  Africa, 
where  he  made  enough  money  from  hotel  construction  to  enable 
him  to  spend  several  years  in  travel. 

Returning  to  Stockholm  in  1907,  he  went  into  partnership 
with  Paul  Toll  in  a  constructional  and  engineering  enterprise. 
Shortly  before  the  World  War  the  firm  of  Kreuger  &  Toll 
wedged  its  way  into  the  Swedish  match  industry.  Within  four 
years,  by  applying  lessons  of  combination  he  had  learned  in 
America,  Kreuger  became  the  dominating  force.  It  was  related 
that,  holding  a  box  of  matches  in  his  hand,  he  enchanted  di- 
rectors by  showing  how,  with  Sweden  controlling  two-thirds  of 
the  world's  match  production,  the  apparently  slight  increase  of 
one-eighth  of  a  cent  per  box  in  the  factory  price  would  yield 
tens  of  millions  of  dollars  more  in  yearly  net  profits.  Kreuger 
was  looked  up  to  as  a  scintillating  business  genius,  and  he  de- 
veloped his  plans  with  a  swiftness  that  astonished  the  Swedish 
business  world. 

Kreuger  soon  outdid  his  American  exemplars.  He  amalga- 
mated Swedish  match  manufacturers  into  the  Swedish  Match 
Company,  a  giant  holding  company,  and,  by  a  series  of  moves, 
linked  this  with  Kreuger  &  Toll.  Perhaps  nobody  but  he  had  any 
clear  understanding  of  the  complicated  network  and  the  in- 
volved finances  of  the  ever-expanding  Kreuger  group  of 
corporations.  These  included  match  factories  not  only  in 
Sweden  and  Norway  but  also  in  Poland,  San  Domingo,  Peru 
and  other  countries — two  hundred  and  sixty  plants  in  all.  Under 
Kreuger's  control  were  eight  large  iron-ore,  pulp  and  other 
natural-resource  corporations  in  Sweden;  farm  mortgage  com- 
panies in  Sweden,  France  and  Germany;  more  than  fourteen 


306  AMERICA  STRIKES  BACK 

telephone  and  telegraph  companies  in  six  European  and  in 
various  South  American  countries;  and  banking  concerns  in 
Sweden,  Amsterdam,  Paris  and  other  cities.  Excepting  Social- 
ists, the  Swedes  in  general  regarded  Kreuger  with  awe;  and  at 
the  same  time  he  stood  out  to  fourteen  European  Governments 
and  one  South  American  Government  as  the  grand  lord  bounti- 
ful whose  inexhaustible  supplies  of  cash  could  conveniently  be 
tapped.  The  arrangement  was  simple.  In  most  cases,  those  Gov- 
ernments created  match  monopolies  which  they  leased  to  the 
Swedish  Match  Company,  or  to  some  affiliated  corporation,  for 
a  stated  period.  Kreuger's  known  loans  to  those  countries  totaled 
$330,000,000. 

A  chart  detailing  the  intricate  inter-relationships  of  the  many 
Kreuger  enterprises  would  arouse  wonder  that  any  mind  could 
keep  track  of  the  bewildering  maze  of  ramifications.  But 
Kreuger  was  gifted  with  a  phenomenal  grasp  of  facts — a 
memory  able  to  master  details  which  would  have  staggered 
most  men.  He  was  a  convincing  talker  and  a  perfect  actor,  who 
thoroughly  understood  the  power  of  apparent  guilelessness  to 
radiate  confidence  among  bankers.  It  was  in  1922  that  he  began 
the  sale  of  his  company's  securities  to  English  financiers.  With 
equally  conspicuous  success  he  palmed  off  great  batches  of 
securities  upon  the  bankers  of  other  countries,  both  European 
and  American. 

A  partner  in  the  conservative  banking  house  of  Lee,  Higginson 
&  Company,  of  Boston,  narrated  in  later  court  proceedings  how 
Kreuger  exercised  an  hypnotic  spell  over  supposedly  hard- 
headed  bankers  in  Europe  and  America.  On  a  visit  to  Stock- 
holm, this  witness  told,  he  found  that  in  business  circles  Kreuger 
was  the  uppermost  subject.  "He  dominated  everything.  I  never 
heard  a  man  more  beautifully  spoken  of.'7  Without  asking 
Kreuger  any  questions  whatever  about  the  affairs  of  his  com- 
panies, that  Boston  banking  firm  readily  consented,  with  a 
child-like  trust,  to  sponsor  his  stock  issues  in  America.  "Such 
implicit  faith"  had  they  in  Kreuger  that  they  "never  even 
thought,"  as  the  partner  testified,  of  obtaining  verification  of 
his  claims  to  the  possession  of  asserted  national  match  monopo- 
lies. From  1915  onward  the  firm  marketed  $150,000,000  of 
his  securities  to  the  American  public,  and  members  of  the  firm 


A  SERIES  OF  EXHIBITS  307 

themselves  so  greatly  prized  Kreuger's  stock  that  they  bought 
millions  of  dollars  of  it  for  their  personal  holdings.  They  made, 
as  a  firm,  more  than  six  million  dollars  in  gross  profits  on  com- 
missions in  underwriting  the  Kreuger  stock  issues  and  distribut- 
ing them  among  six  hundred  American  banks  and  brokerage 
houses,  which  disposed  of  them  at  high  prices  to  investors  as- 
sured of  their  "gilt-edged"  quality. 

Kreuger's  sway  over  minds  reputedly  adamantine  in  their 
resistance  to  the  surrendering  of  cash  without  due  pledges  was 
shown  by  the  action  of  a  group  of  American  bankers  in  loan- 
ing him  $15,000,000  upon  no  other  security  than  his  bare  word. 
From  descriptions  furnished  later  by  some  Swedish  acquaint- 
ances, Kreuger  became,  it  would  seem,  intoxicated  with  the 
idea  of  his  incomparable  rank  as  the  world's  super  business 
man.  In  his  role  of  international  financier  he  was  overcome,  it 
was  also  said,  by  a  boundless  delusion  of  grandeur.  If  this 
were  so,  the  probability  was  that  he  measured  himself  only  by 
his  successes  and  took  lightly  the  fraudulent  practices  used  in 
achieving  them.  Some  of  these  practices  were  not  uncommon 
among  certain  types  of  business  men  in  other  countries;  and 
if  Kreuger  did  bestow  serious  thought  upon  his  own  frauds,  he 
could  feel  that  he  excelled  all  others  in  effectual  audacity. 

He  had  due  opportunity  to  note  the  methods  which  had  been 
employed  by  one  of  Britain's  leading  business  characters.  A 
winged  rumor  in  London  of  the  issuance  of  a  warrant  against 
"a  world-famous  business  man"  was  officially  denied,  but  it 
soon  turned  out  to  be  true.  For  a  quarter  of  a  century  Lord  Kyl- 
sant  had  been  a  notability  as  chairman  of  the  Royal  Mail  Steam 
Packet  Company.  The  prosecution  charged  that  the  prospectus 
issued  by  him  to  float  £2,000,000  debentures  for  the  erection 
of  a  new  company  building — the  Royal  Mail  House — and  for 
general  purposes  was  so  drawn  as  to  carry  the  conviction  that, 
during  the  previous  ten  years,  the  company  had  made  an  annual 
profit  in  the  vicinity  of  £500,000  a  year.  During  some  of  these 
years,  however,  the  company  had  incurred  heavy  losses.  By 
manipulating  figures  and  raiding  reserves  of  subsidiary  com- 
panies, Kylsant  produced  a  fictitious  showing.  In  June,  1931, 
he  was  convicted  of  having  made  false  statements  in  his  1926 
and  1927  reports  with  intent  to  deceive  stockholders.  As  his 


308  AMERICA  STRIKES  BACK 

remuneration  was  based  upon  commissions  paid  on  volume  of 
gross  profits  Kylsant  was  not  without  personal  motive  for  his 
frauds.  In  1927  he  drew  a  sum  almost  equaling  $130,000  as  his 
salary  and  commission.  No  less  a  personage  than  the  Duke  of 
Abercorn,  records  of  the  stockholders'  annual  meeting  in  that 
year  showed,  seconded,  as  a  matter  of  form,  the  motion  to  adopt 
his  report.8  The  ire  of  influential  stockholders  overflowed  at 
finding  out  how  the  trusted  Kylsant  had  imposed  upon  their 
confidence. 

Of  "strict  British  justice"  much  had  been  professed.  But  it 
had  been  a  justice  rigorously  visited  upon  the  poor.  Penaliz- 
ing for  financial  buccaneering  was  a  comparatively  new  de- 
velopment. With  such  indifference  did  generations  of  British 
law-makers  regard  false  financial  statements  prepared  for  public 
consumption  that  there  was  no  specific  inhibiting  statute.  In- 
credible as  this  fact  may  seem,  it  was  demonstrated  only  two 
decades  or  so  before  Kylsant's  acts. 

After  a  group  of  companies  fraudulently  promoted  by 
Whitaker  Wright  had  collapsed,  the  Attorney-General  (Sir 
Robert  Finlay),  in  the  House  of  Commons,  had  scouted  the 
notion  that  punishment  could  be  meted  for  the  making  of  a 
false  balance  sheet  for  public  deception.  Section  84  of  the  Lar- 
ceny Act  of  1861,  he  explained,  provided  for  particular  cases 
of  stockholders  and  creditors  only,  and  "does  not  provide  at 
all  for  the  case  of  misrepresentations  made  with  the  general  in- 
tent to  defraud  the  public."  In  support  of  his  elucidation  he 
cited  a  charge  made,  in  1880,  by  Chief  Justice  Cockburn  to  a 
jury  in  a  case  that  involved  the  defrauding  of  the  public  by 
intentional  misrepresentation  of  worthless  assets  as  having  a 
value  between  £1,000,000  and  £2,000,000.9 

When  Wright  fled  to  America,  some  angry  House  of  Commons 
members  raised  a  tempest.  Remissness  was  charged  to  the  legal 
authorities  for  having  given  him  opportunity  to  decamp.  "The 
circumstances  under  which  Wright  was  allowed  to  escape,"  one 
member — Swift  MacNeill — exclaimed,  "looked  as  if  there  was 
one  law  for  the  rich  and  another  for  the  poor."  10  Wright  was  ex- 
tradited to  England,  where  a  judge  did  manage  to  find  grounds 
under  some  law  or  other  to  fix  legal  responsibility  upon  him  for 
having  issued  prospectuses  juridically  described  as  "fascinat- 


A  SERIES  OF  EXHIBITS  309 

ing,"  "cunning"  and  "tricky."  Upon  receiving  a  prison  sentence 
of  seven  years,  Wright  killed  himself.  Comment  was  made  in 
some  journals  on  the  position  of  Lord  Dufferin  who,  it  was 
openly  stated,  had  read  at  the  stockholders'  meetings  addresses 
practically  written  by  Wright. 

Lord  Kylsant  was  undone  and  weighted  with  a  sentence  of 
twelve  months  in  prison,  but  Kreuger  could  contemplate 
Kylsant's  fate  with  the  superior  feeling  that,  more  astute  or 
fortunate,  he  himself  had  long  continued  to  surmount  any  ques- 
tion of  his  acts.  Subsequently,  Percy  A.  Rockefeller,  one  of 
America's  leading  capitalists  and  a  director  of  the  International 
Match  Corporation,  gave  his  testimony  on  this  point.  Admitting 
that  he  had  never  tried  to  verify  Kreuger's  statements,  Rocke- 
feller told  how  he  had  "relied  implicitly"  upon  Kreuger's  word, 
accepting  it  without  question.  In  parts  of  his  operations,  at  least, 
Kreuger  had  no  reason  to  think  of  himself  as  committing  any 
unusual  criminality. 

The  shaky  situation  in  Britain,  with  its  consequent  tremors 
among  some  prominent  business  men  over  the  putative  penal 
consequences  of  their  frauds,  was  thus  set  forth  by  "The  Econo- 
mist," of  London  (November  7,  1931),  after  Kylsant's  appeal 
had  been  dismissed  by  the  Criminal  Court  of  Appeals:  "Many 
of  the  promoters  of  the  more  highly  speculative  issues  of  the 
1928-1929  boom  must  needs  have  scrutinized  the  reports  of  the 
trial  with  the  painful  reflection  that  a  slight  turn  of  fate  might 
well  have  found  them  playing  a  central  role  in  the  drama." 

In  the  desolating  sweep  of  the  world  depression,  the  market 
value  of  Kreuger  &  Toll  and  Swedish  Match  Company  stock 
shrank  at  a  terrific  pace  in  1930-1931.  No  suspicions  were  held 
of  Kreuger  insolvency.  Suddenly,  early  in  March,  1932,  flashed 
the  startling  news  of  Kreuger's  suicide  in  Paris.  The  immedi- 
ate cause  of  this  act  was,  it  seems,  a  polite  but  firm  inquiry  by 
certain  bankers  reminding  him  of  a  debt  of  $11,000,000  due 
to  the  International  Telephone  &  Telegraph  Company.  Now, 
following  his  suicide,  came  a  hurricane  of  trepidation  in  hyper- 
sensitive stock  markets.  Investors  everywhere  were  terror- 
stricken,  for  into  his  securities  had  gone  three-quarters  of  a 
billion  dollars.  At  least  $250,000,000  (some  estimates  made  out 
a  much  larger  sum)  was  contributed  by  Americans;  and  hun- 


310  AMERICA  STRIKES  BACK 

dreds  of  millions  of  dollars  had  been  exchanged  by  Swedish, 
British,  French,  Dutch  and  Swiss  investors  for  his  bits  of  paper. 

An  investigating  committee  quickly  appointed  by  financial 
interests  in  Stockholm  began  finding  the  grisly  truth.  Ac- 
countants had  hardly  got  below  the  surface  before  they  dis- 
covered that  the  Kreuger  ledgers  were  "grossly  wrong"; 
falsification  had  been  done  on  a  huge  scale.  Some  assets  were 
imaginary,  others  were  listed  in  duplicate.  Accounts  had  been 
manipulated  by  fictitious  entries  so  as  to  conceal  debts.  For  at 
least  eight  years  these  frauds  had  been  going  on.  "We  know 
now,"  fumed  the  editor  of  the  "Social  Demokraten,"  a  Stock- 
holm newspaper,  "that  the  Kreuger  company  broke  down  not 
because  of  bad  luck  or  bad  conditions  but  because  of  dishon- 
esty." But  these  revelations  were  only  a  prelude.  To  get  the 
money  to  pay  dividends  to  American  stockholders,  Kreuger  had 
juggled  funds.  From  banks  he  had  twice  borrowed  $50,000,000 
on  the  same  block  of  German  bonds,  stealing  them  from  the 
International  Match  Corporation  of  which  he  was  president, 
and  depositing  them  to  his  own  credit  in  a  Stockholm  bank. 

Forthwith  came  evidence  of  his  forging  on  an  amazing  scale. 
In  his  private  room  at  the  Match  Trust  offices  the  Stockholm 
police  found  an  assortment  of  rubber  stamps  giving  facsimile 
signatures  of  public  officials  and  prominent  persons.  Seemingly, 
whenever  there  came  into  his  possession  any  signature  he 
thought  might  prove  useful,  he  caused  a  rubber  stamp  to  be 
made.  World  astonishment,  already  great,  grew  greater  when 
Italy's  Government  declared  a  brazen  forgery  the  alleged 
Italian  match  monopoly  inventoried  by  Kreuger  as  worth  more 
than  $52,000,000.  Spain's  Government  likewise  announced  that 
Kreuger's  claim  to  a  Spanish  monopoly,  which  he  valued  at 
nearly  $28,000,000,  was  a  myth. 

These  were  some  of  the  tangle  of  his  enormities.  In  addition, 
he  had  secretly  speculated  in  his  own  securities,  with  resultant 
heavy  losses.  His  personal  debts,  an  inventory  of  his  estate 
showed,  reached  $179,000,000,  while  his  assets  (many  of  doubt- 
ful value)  amounted  to  less  than  $18,000,000.  Proofs  were 
found  of  his  having  paid  blackmail  to  many  women,  and  of 
payments  to  European  public  men.  Among  Kreuger's  corre- 
spondence was  found  a  letter  showing  a  donation  of  50,000 


A  SERIES  OF  EXHIBITS  311 

kroner  to  the  Swedish  Prime  Minister  Carl  Gustav  Ekman, 
whose  resignation  was  now  forced  by  public  outcry.  "What  has 
happened,"  moaned  the  Stockholm  newspaper  "Dagen  Ny- 
heter,"  "is  heart  breaking  for  Sweden's  reputation."  And  the 
Swedish  administrators  of  bankruptcy,  seeking  to  make  a 
demarcation  relieving  the  Swedish  business  men  of  disrepute, 
reported  their  finding:  "It  is  not  as  a  business  man  but  as 
a  criminal  that  Kreuger  was  distinguished  from  his  fellow 
men."  A  brief  while  ago  statesmen  had  courted  Kreuger,  and 
sovereigns  had  been  glad  to  claim  his  friendship.  Now  he  was 
represented  by  the  European  press  as  the  blackest  of  figures.  A 
"prince  among  swindlers,"  "the  arch  impostor  of  the  ages,"  "a 
devil  in  human  guise."  These  were  some  of  the  expressions,  oft 
mingled  with  the  melancholy  reflection  that  the  world  at  large 
had  shown  itself  a  great  fool  by  accepting  Kreuger  at  his  own 
valuation  for  eight  years. 

Hordes  of  investors  everywhere  were  plunged  into  partial  or 
complete  ruin.  From  all  quarters  came  pitiful  tales  of  destitu- 
tion following  losses.  In  Sweden  itself,  where  large  sections  of 
the  middle  class  had  confided  their  money  to  Kreuger,  the  re- 
sult was  calamitous.  The  rise  in  the  number  of  suicides  and 
sudden  deaths  in  Stockholm  was  affrighting,  and  great  pro- 
portions of  the  middling  population  found  themselves  precipi- 
tated from  affluence  or  ease  to  penury.  The  final  filing,  in  1935, 
of  claims  against  the  Kreuger  estate  and  his  concerns  brought 
the  total  to  2,842,704,000  kroner  (about  $700,000,000). 

Americans  were  familiar  with  the  names  and  activities  of  few 
other  big  European  industrial  leaders  and  promoters.  To  Thys- 
sen  and  to  Stinnes  in  Germany  considerable  notice  was  given 
in  American  newspapers,  and  a  large  share  of  attention  to 
Andre  Citroen,  chiefly  because  he  was  designated  "the  Henry 
Ford  of  France."  Citroen  was  credited  with  having  adopted 
American  business  methods,  which  he  had  studied  while  visit- 
ing America  in  1912  and  in  later  years.  He  led  thereby  in  revo- 
lutionizing the  European  motor-car  industry;  his  extensive 
automobile  factories  in  France  employed  20,000  workers.  That 
there  was  in  Belgium  a  man  whose  wealth  supposedly  approxi- 
mated that  of  Ford  or  of  the  Rockefellers  the  generality  of 


312  AMERICA  STRIKES  BACK 

Americans  did  not  know,  until  American  newspapers  featured 
the  singular  and  tragic  death  of  Captain  Alfred  Lowenstein. 

In  addition  to  his  European  reputation  of  " Belgian  Santa 
Claus"  and  "Croesus,"  Lowenstein  was  also  viewed  as  "the 
mystery  man  of  Europe."  And  there  was  mystery  as  to  how,  in 
the  course  of  thirty  years,  he  had  stepped  from  nothingness  to 
a  commanding  position  of  great  wealth.  Such  information  as 
was  supplied  about  Lowenstein's  career  was  scanty, — of  the 
conventionally  eulogistic  European  kind, — and  was  marked  by 
large  and  important  omissions  of  explanatory  facts. 

His  father,  a  small  Brussels  banker,  died  in  debt,  it  was 
related;  and  Alfred  worked  to  pay  off  family  creditors.  The 
goodness  of  this  act  was  stressed  in  all  accounts,  which  further 
told  how  he  then  set  out  to  make  his  own  fortune  by  selling  in 
Brussels  the  securities  of  hydro-electric  companies  promoted 
in  South  America  and  elsewhere  by  the  British  Dr.  Pearson.  A 
great  gap  in  the  accounts  ensued,  and  the  next  fact  learned  was 
that  Lowenstein  had  accumulated  enough  wealth  to  make  a 
much-needed  loan  to  the  British  Cellulose  &  Chemical  Com- 
pany, later  the  British  Celanese,  Limited.  It  was  after  the 
World  War  that  he  spread  out  hugely,  organized  a  holding 
company  which  successively  obtained  control  of  Belgian, 
Dutch,  French,  German,  Polish  and  American  artificial  silk 
companies.  Another  holding  company  was  created  by  him  to 
take  over  his  electric-light  plant  interests  in  many  countries, 
powerful  British  and  Canadian  financiers  joining  in  the  enter- 
prise. He  became  owner  of  manganese  iron  mines  in  Silesia, 
steel  furnaces  in  northern  Spain,  vast  Congo  rubber  planta- 
tions, and  in  other  ways  expanded  proprietorship. 

Lowenstein's  mode  of  life  was  that  of  a  magnifico.  He  had  a 
castle  in  Brussels,  a  house  in  London,  maintained  a  racing  stud 
in  Leicestershire,  England,  and,  so  it  was  recorded,  owned  eight 
villas  in  Biarritz  alone.  On  his  trips  between  European  centers 
he  was  accompanied  by  a  corps  of  secretaries  and  typists. 
Voyaging  to  America  his  entourage  was  even  larger,  including 
also  a  private  detective,  a  masseur  and  an  airplane  pilot.  Along 
with  him  were  conveyed  two  automobiles.  So  profusely  did  he 
use  the  ship  radio  that  on  a  single  trip  his  bill  amounted  to 
$3,500.  In  an  interview  he  expressed  his  high  admiration  for 


A  SERIES  OF  EXHIBITS  313 

American  business  methods  of  which,  said  he,  "I  have  always 
made  use."  Both  in  Europe  and  America  he  traveled  in  one  of 
his  twenty-passenger  planes,  and  it  was  while  crossing  the 
English  Channel,  returning  from  London  to  Brussels,  that,  on 
July  4,  1928,  he  disappeared.  The  assumption  given  out  was 
that  he  had  opened  the  wrong  door  from  his  compartment  and 
had  fallen  into  the  sea.  At  any  rate,  the  episode  remained  en- 
cased in  mystery;  almost  equally  in  the  dark  was  his  financial 
status  at  the  time.  One  fact  and  one  only  was  generally  known 
in  European  financial  centers.  His  ambitions  had  gone  far  be- 
yond the  point  where  he  could  be  content  with  mere  invest- 
ments, and  he  had  aimed  at  nothing  less  than  big  amalgamations 
absolutely  controlled  by  himself.  This  aim  had  led  to  violent 
conflicts  with  owners  of  various  companies,  especially  with 
British  Celanese,  Limited.  Disposing  of  his  holdings  in  this 
company,  he  sought,  by  warring  upon  it,  to  make  it  yield  to 
him  or  be  ruined,  and  this  conflict,  at  the  time  when  he  dropped 
out  of  sight,  had  reached  a  critical  stage. 

Americans  had  no  such  acute  interest  in  foreign  financial 
happenings  as  did,  for  instance,  British  security  holders.  In 
1924  they  were  drawing  a  computed  £156,000,000  (another 
estimate  stated  £208,000,000)  of  net  income  from  investments 
abroad.  In  general,  American  small  investments  were  in  native 
securities,  and  such  scandals  of  corporate  plundering  as  oc- 
cupied American  attention  at  large  were  almost  wholly  those  in 
America  itself.  American  popular  investments  in  a  foreign  con- 
cern like  Kreuger's  were  among  the  exceptions.  Americans  had 
little  or  no  adequate  knowledge  of  the  facts  or  methods  of 
groups  of  industrial  leaders  in  Britain  or  in  other  lands.  Conse- 
quently, Americans  were  led  to  imagine  crooked  finance  an 
American  institution;  and  Kreuger's  knavery  seemed  to  stand 
out  all  the  more  sharply  in  contrast  to  what  Americans  sup- 
posed were  the  staid,  conservative  and  correct  methods  in 
Europe. 

Recurrent  financial  scandals  in  France  were  looked  upon  by 
Americans  as  something  outside  the  orbit  and  regularities  of 
established  French  finance.  Those  scandals,  however,  were  not 
exceptional  but  were  the  sequel  to  operations  commonplace 
in  France.  Large  groups  of  the  French  people,  though  frugal 


314  AMERICA  STRIKES  BACK 

and  parsimonious,  were  easily  induced  to  hand  over  the  fruit 
of  their  hoarding  to  promoters  who  would  hold  out  the  irresist- 
ible lure  of  unusually  large  dividends. 

One  of  a  number  of  promoters  in  post-war  Paris  was  Mme. 
Marthe  Hanau.  From  the  ownership  of  a  lingerie  shop  in  Mont- 
martre,  she  began,  in  1920,  ballooning  into  high  finance.  How 
she  obtained  the  funds  needed  to  embark  in  her  extensive  op- 
erations remained  a  riddle.  Aided  by  her  divorced  husband, 
she  organized  a  group  of  finance  and  banking  companies,  and 
promised  investors  the  grand  possibility  of  as  much  as  40  per 
cent  returns  from  her  speculations.  She  imitated  British  methods 
in  giving  eclat  and  an  aristocratic  air  to  her  companies  by 
having  as  directors  titled  Frenchmen  of  the  "old  nobility."  One 
of  these  personages  was  the  Due  d'Ayen  who,  as  he  later  testi- 
fied, allowed  the  use  of  his  name  for  a  consideration  of  1,800,- 
000  francs  (about  $70,380)  in  shares  of  the  General  Financial 
Company.  To  push  her  companies  she  ran  a  financial  news- 
paper, the  "Gazette  de  France,"  the  directors  of  which  included 
prominent  French  politicians. 

There  was  not  an  open-eyed  French  promoter  who,  in  a 
vaguely  general  way,  did  not  know  of  the  great  sums  of  money 
in  hiding  throughout  France.  But  even  fraudulent  promoters, 
with  their  predacious  sixth  sense,  had  no  adequate  knowledge 
of  how  immense  was  the  amount.  Eagerly  did  they  imbibe  in- 
formation which  came  out  in  1925,  in  the  Budget  Bill  discus- 
sion in  the  Chamber  of  Deputies.  The  tax  on  acquired  wealth 
had  augmented  hoarding,  so  that  now  nearly  eight  milliards 
(eight  billions)  of  francs  were  concealed  "in  sterile  safety 
throughout  the  country."  This  complaint  was  amplified  in  the 
Senate  by  Henri  Berenger.  "These  milliards,"  he  stated,  "are 
being  hoarded  in  strong  boxes  and  woolen  stockings,  which  has 
reduced  our  real  note  circulation  to  thirty-three  milliards." 
The  mentality  of  the  millions  of  small  French  investors  was, 
he  added,  "perhaps  the  most  sensitive  and  easily  alarmed  mind 
in  the  world."  Some  of  their  money  had  also  been  sent  to 
Switzerland,  Holland,  Belgium  and  other  countries  where  it 
would  be  sheltered  from  the  reach  of  French  taxation. 

But  much  as  they  sought  to  hug  their  money,  large  numbers 
of  French  town  and  village  investors  were  no  match  for  wily 


A  SERIES  OF  EXHIBITS  315 

promoters.  The  amount  taken  in  by  Mme.  Hanau's  companies 
was  estimated  all  the  way  from  100,000,000  to  500,000,000 
francs — her  liabilities,  in  fact,  were  110,000,000  francs.  Dur- 
ing nearly  nine  years  she  had  done  a  flourishing  business  selling 
stock  in  her  companies.  When  she  and  they  went  into  bank- 
ruptcy in  1928,  piercing  was  the  outcry  from  a  multitude  of 
investors.  The  Madame  and  her  ex-husband  were  arrested. 
Ugly  charges  were  now  forthcoming:  some  newspaper  pub- 
lishers were  accused  of  having  received  either  money  or  shares 
for  furnishing  her  with  lists  of  subscribers;  members  of  the 
French  Parliament  were  accused  of  connivance  with  her,  and 
there  was  a  squall  in  the  Chamber  of  Deputies.  After  several 
months  in  jail  Mme.  Hanau  sent  forth  tidings  that  she  could 
pay  creditors.  This  claim  was  of  no  effect;  her  later  trial 
resulted  in  a  sentence  of  three  years  in  prison,  where,  in  July, 
1935,  she  ended  her  career  by  an  overdose  of  narcotics. 

"An  enterprise  for  the  exploitation  of  French  savings,"  the 
"Journal  des  Debats"  of  Paris  called  her  operations.  But  hers 
was  only  one  of  many.  Under  the  broad  generosity  of  French 
law  there  was  nothing  to  prevent  an  undischarged  bankrupt  or 
a  person  with  a  criminal  record  from  going  into  business  as  a 
private  banker  or  as  a  promoter.  There  was  no  protective  reg- 
ulation to  cover  the  issuing  or  advertising  of  stocks  and  bonds. 
Yet,  even  had  there  been  strict  laws,  it  would  have  been  diffi- 
cult to  shield  the  public  from  its  own  gullibility  and  greed. 

How  easily  the  decoying  was  done  may  be  shown  by  two 
typical  cases.  In  the  first  a  professor  of  law,  tired  of  eking  out 
his  modest  salary,  started  company  promoting,  and,  since  he 
was  versed  in  every  turn  and  loophole  of  legal  procedure,  he 
knew  perfectly  how  to  chart  his  course.  Assurances  of  extra 
high  dividends  brought  in  loads  of  money.  As  fast  as  a  million 
francs  came  to  one  of  his  companies,  that  company  vanished, 
and  there  was  promptly  organized  another  which  repeated  the 
performance.  Under  different  guises  he  formed  many  com- 
panies, all  of  which  were  himself;  for  the  loot,  as  subsequent 
evidence  showed,  went  entirely  into  his  pockets.  The  second 
swindle  was  a  pork  company  which  excited  many  French  vil- 
lagers by  the  pictured  wonders  of  its  pig-rearing  farm  and  by 
the  promise  of  16  per  cent  dividends.  Further  to  attract  share 


316  AMERICA  STRIKES  BACK 

buyers,  the  company  declared  that  each  stockholder  was  en- 
titled to  a  suckling  pig  which  the  company  would  benevolently 
fatten  and  hold  for  his  ownership.  This  inducement  had  a  strong 
practical  appeal  to  France's  agricultural  class — that  is,  to  be- 
tween one-third  and  one-half  of  the  entire  population.  Money 
rained  upon  the  company,  and  still  more  would  have  come  in, 
had  it  not  been  for  the  bursting  curiosity  of  some  investors. 
They  went  to  see  their  pigs,  only  to  be  informed  that  unfor- 
tunately theirs  had  died.  Upon  tallying  experiences  investors 
learned  that  the  situation  was  general,  and  public  disclosures 
followed. 

But,  since  this  is  not  a  history  of  French  financial  scandals, 
we  shall  pass  over  other  notorious  instances.  In  1929  a  Paris 
newspaper  estimated  that,  from  the  Humbert  embezzlement 
thirty  years  before  down  to  date,  more  than  300,000,000,000 
francs — a  sum  equal  to  France's  internal  and  foreign  debts — 
had  been  taken  by  the  sale  of  worthless  shares.  This  estimate 
might  have  been  exaggerated;  but  unquestionably  the  amount 
sunk  in  speculation  was  enormous,  for  apart  from  bogus  enter- 
prises there  were  many  valid  companies  turning  out  quantities 
of  watered  stock.  Corps  of  unctuous  stock  salesmen  thronged 
public  places  in  Paris  to  inveigle  prospects — a  condition  paral- 
leled, it  is  worth  noting,  in  Italy.  There  speculative  mania  in 
the  avalanche  of  new  stock  issues  caused  the  Committee  of  the 
Milan  Stock  Exchange,  in  1925,  to  restrict  the  crowd  by  estab- 
lishing admission  by  ticket — an  unprecedented  action  in  that 
country.  Yet  these  were  years  in  which  cartoons  in  French  and 
Italian  papers  were  universally  depicting  America  as  a  huge 
money  ogre. 

The  World  War  was  the  opportune  occasion  seized  by  exist- 
ent British  Trusts  greatly  to  enlarge  their  power.  This  ex- 
pansion, as  the  official  Committee  on  Trusts  reported  early  in 
1918,  had  been  enormously  strengthened  by  the  Government's 
war  policy  of  rationalizing  trade.11  Then,  and  in  the  years 
immediately  following,  huge  mergers  were  effected  along  Amer- 
ican lines  but  without  American  safeguards  for  investigation. 
Complaining  of  the  absence  of  these,  the  Departmental  Com- 
mittee on  Trusts,  in  its  report  of  April,  1919,  recommended: 


A  SERIES  OF  EXHIBITS  317 

"We  are  unanimously  of  the  opinion  that  it  would  be  desirable 
to  institute  in  the  United  Kingdom  machinery  for  the  investi- 
gation of  monopolies,  Trusts  and  combines,  similar  to  the  com- 
missions and  tribunals  created  for  that  purpose  in  the  United 
States  of  America  and  British  Colonies  [Canada]."  Five  years 
later,  though,  we  find  the  leading  London  financial  journal 
protesting  because  the  Committee's  unanimous  opinion  had 
gone  unheeded.12 

Industrial  magnates  continued  doing  as  they  pleased  with 
no  fear  of  investigation.  Although  legally  invalid,  great  holding 
companies  (shaped  after  the  American)  were  organized;  not 
until  1928  did  these  British  companies  have  behind  them  the 
authority  of  definite  legal  recognition.  Parliament,  full  of  cor- 
poration directors  or  stockholders,  took  no  steps  to  regulate 
these  giant  concerns  in  the  interest  of  the  community.  In  Amer- 
ica and  in  some  European  countries  the  reporting  of  a  con- 
solidated balance  sheet  for  the  whole  group  of  companies  in  a 
holding  company  was  a  general  requirement.  Holding  com- 
panies, by  1931,  had  penetrated  every  branch  of  British  in- 
dustry, but  the  supplying  of  a  consolidated  balance  sheet  was 
not  compulsory  in  Britain,  and  accordingly  there  was  no  en- 
lightenment as  to  the  financial  state  of  such  commercial  ag- 
glomerations. Some  of  these  companies  were  international  in 
scope,  as  for  example  the  "Unilever"  colossus,  embodying  more 
than  six  hundred  companies  in  Britain,  Holland  and  in  eastern 
and  central  Europe,  and  having  complete  control  there  of  soap, 
oil-seed  crushing  and  margarine  from  the  raw-material  stage  to 
retail  distribution.  One  of  the  constituents  of  this  huge  com- 
pany was  the  firm  of  Lever  Brothers  (productive  of  Lord 
Leverhulme).  This  firm  in  itself  was  an  enormous  holding  con- 
cern, and  one  of  its  subsidiaries  was  the  Niger  Company  which 
had  merged  with  other  African  palm  oil  companies. 

Side  by  side  with  widespread  joblessness,  extreme  poverty, 
and  the  distribution  of  the  dole  by  the  Government,  it  now 
appeared  that  Britain's  possessing  classes  had  a  greater  income 
flow  than  ever  before.  The  total  in  1924  was  £4,213,000,000, 
two  thousand  million  pounds  more  than  the  amount  thirteen 
years  previously.  The  bulk  of  this  income — above  four  thou- 
sand million  pounds — came  from  within  Britain  itself,  £205,- 


318  AMERICA  STRIKES  BACK 

000,000  representing  corporation  income  and  undivided  profits. 
Such  were  the  findings  of  the  financial  authorities,  Professor 
A.  L.  Bowley  and  Sir  Josiah  Stamp,13  although  the  figures 
should  be  qualified  by  allowance  for  an  inflationary  period. 

This  abundance  of  money  provided  company  promoters  of 
all  shades  with  an  urgent  reason  for  speeding  from  the  printing 
presses  great  quantities  of  watered  stock.  In  an  article  pub- 
lished on  May  31,  1928,  Thomas  Shaw,  who  had  been  Minister 
of  Labor  in  the  MacDonald  Cabinet,  grouped  a  number  of 
complaints.  He  protested  because  British  capital  had  been 
"watered  to  an  enormous  extent/'  which  obviously  was  true. 
But  as  to  another  condition  he  was  not  so  well  informed.  He 
complained  of  the  backwardness  of  British  corporation  di- 
rectors in  not  adopting  new  methods.  Those  directors,  he  wrote, 
drew  huge  salaries  and  "appear  to  be  gilded  spongers  on  in- 
dustry." In  point  of  fact  many  British  business  leaders  had 
already  adopted  every  available  American  money-making  de- 
vice. The  American  plan  of  selling  goods  on  installment  pay- 
ments had  been  transplanted,  and  was  known  there  as  "hire 
purchase."  One  result  was  a  300  per  cent  increase  in  automo- 
bile sales  in  Europe  in  the  eight  years  after  1920.14  Expanding 
sales  were  plausibly  cited  by  corporations  as  a  sound  reason 
for  showering  stock  issues.  To  sell  these,  British  business  finan- 
ciers zealously  followed  the  American  corporation  system  of 
ministering  to  what  was  called  popular  stock  ownership.  No 
longer  was  the  moderate  investor  ignored,  or  the  small  investor 
scorned.  The  mass  of  purchasers  in  big,  excessively-capitalized 
industrial  corporations  had  no  suspicion  that  the  ratio  of  profits 
was  grossly  insufficient  to  justify  a  basis  for  the  high  prices 
asked  for  the  stock.  There  came  febrile  London  Stock  Market 
booms  with  manipulated  ascending  prices  to  fire  the  eagerness 
of  an  overwrought  public. 

How  widely  British  corporations  succeeded  in  disseminating 
their  stock  was  shown  by  a  private  financial  investigation  in 
1926.  There  were  in  Britain  95,000  companies  with  a  total  paid 
up  capital  of  £4,500,000,000.  The  vast  majority  of  stock- 
holders, records  of  eighteen  of  the  large  corporations  evidenced, 
had  individually  less  than  £500  invested.  The  claim  now  made 
was  that  stock  ownership  had  become  "a  truly  democratic 


A  SERIES  OF  EXHIBITS  319 

business."  The  balance  of  that  democracy  seems,  however,  to 
have  been  weighted  rather  heavily  in  favor  of  the  corporation 
heads.  For,  so  we  learn,  "provided  that  the  mass  of  stock- 
holders receive  their  dividends,  the  directors  may  hold  their 
power  indefinitely  .  .  ."  nor  is  that  an  exaggeration,  since  it 
takes  "considerable  expenditure  of  time  and  money  to  organize 
the  thousands  of  small  stockholders  whose  votes  are,  in  the 
last  resort,  the  controlling  factor."  15 

Vulpine  promoters  of  a  large  miscellany  of  new  companies 
overlooked  no  possibility  of  loot.  "The  speculative  promoter  or 
issuing  house,  as  a  rule,"  stated  "The  Economist,"  "regards 
business  from  the  angle  of  salesmanship.  He  is  concerned  to  dis- 
cover new  enterprises  which  will  'go  well'  when  offered  to  the 
public,  and  after  making  an  issue  is  anxious  to  'get  out7  as 
quickly  as  possible."  Some  American  "high-pressure"  methods 
of  stock  selling  were  closely  copied.  Traveling  in  automobiles, 
glib,  sprucely-dressed,  keen-eyed  salesmen  scoured  the  country- 
side in  England  and  Scotland.  They  were  equipped  with  lists 
of  persons  known  to  have  money,  and  carried  sheaves  of  allur- 
ing "literature."  Among  the  force  were  American  adepts  whose 
services  were  doubtless  requisitioned  to  coach  the  rest.  Another 
and  also  effective  method  was  the  inducing  of  corporation 
clerks  to  supply  great  lists  of  existent  stockholders.  These  were 
"intensively"  circularized,  and  enticing  personal  visits  fol- 
lowed. In  hotels  and  restaurants  there  was  so  much  button- 
holing and  badgering  by  stock  vendors  that  measures  were 
moved  in  Parliament  to  check  the  nuisance. 

High  in  the  ranks  of  the  more  venturesome  and  spectacular 
promoters  was  James  White,  popularly  and  even  endearingly 
called  Jimmy  White.  After  he  had  achieved  what  seemed  phe- 
nomenal success,  the  story  of  his  career  appealed  to  numbers 
of  his  countrymen  with  the  captivating  charm  of  a  fairy-tale 
enacted  in  life.  As  a  youth  he  had  been  a  bricklayer's  appren- 
tice, and  when  eighteen  years  old  had  shown  initiative  and 
resourcefulness  by  contracting  for  cottage  building.  His  capital 
was  so  tiny  that,  to  continue,  he  had  to  mortgage  the  houses 
room  by  room.  He  went  into  ambitious  real  estate  dealing 
which  whelmed  him  in  bankruptcy.  From  this  he  gradually  and 
buoyantly  emerged.  Resuming  the  real  estate  business,  he 


320  AMERICA  STRIKES  BACK 

found  a  powerful  backer  and  associate  in  Sir  Joseph  Beecham 
of  pill-making  fame.  The  Beecham  Trust  was  organized;  White 
became  its  chairman  and  managing  director;  and  through  it 
he  handled  a  succession  of  bold  deals  in  stock  flotations  of 
rubber,  cotton,  brewery,  department-store  and  other  syndicates. 
He  had  no  knowledge  of  industrial  affairs,  but  fortune  was 
blindly  with  him,  and  "Jimmy  White  luck"  became  a  popular 
fetich. 

When  White  reached  out  to  buy  control  of  British  Controlled 
Oilfields,  a  corporation  with  £9,000,000  capital,  his  many  fol- 
lowers heeded  his  generously  given  advice  to  invest  in  its  pre- 
ferred stock.  Of  the  oil  business  White  knew  nothing,  but  it 
was  later  recorded  that  his  secret  purpose  after  obtaining  con- 
trol of  the  stock  was  to  sell  it  to  the  Standard  Oil  Company  for 
perhaps  five  times  the  amount  he  had  paid.  Most  unexpectedly, 
however,  revelations  of  the  position  of  British  Controlled  Oil- 
fields became  public.  In  November,  1925,  the  board  of  di- 
rectors was  replaced  by  a  new  body  which,  under  the  direction 
of  Lord  Buckmaster,  disclosed  nearly  a  year  later  the  startling 
fact  that  of  the  company's  $45,000,000  capital  $30,000,000 
had  been  lost  in  payments  for  worthless  concessions.  Following 
its  incorporation  in  1919,  the  company  in  the  next  year  had 
bought,  by  the  issue  of  $4,375,000  of  preferred  and  $15,000,000 
of  common  stock,  certain  rights  represented  as  of  great  value 
in  Ecuador  and  Costa  Rica.  Those  concessions  turned  out  to 
be  invalid.  For  other  concessions  in  Central  and  South  Amer- 
ican countries  the  company  had  paid  $5,000,000  in  preferred 
shares,  only  to  discover  that  in  but  one  case  was  the  property 
of  any  value. 

For  months  the  market  price  of  the  company's  stock  had 
been  crumbling.  But  White  had  heavily  committed  himself  to 
purchases  of  the  stock,  and,  when  faced  by  a  London  Stock 
Exchange  settlement  rule,  he  could  not  raise  an  immediate 
£750,000.  On  a  July  day  in  1927  he  locked  himself  in  a  room 
in  his  suburban  home,  left  a  pathetic  adieu,  and  chloroformed 
himself  to  death — one  more  sudden  extinction  from  the  ranks 
of  financial  "wizards"  whose  operations  had  brought  disastrous 
losses  to  investors.  Following  the  stock-watering  monomania 
some  corporations  were  confronted  with  the  necessity  of  earn- 


A  SERIES  OF  EXHIBITS  321 

ing  dividends — a  problem  which  they  set  about  solving  by  wage 
reductions.  In  several  leading  industries  there  ensued  great 
strikes  or,  when  employes  refused  to  take  a  cut  in  wages,  great 
lockouts. 

But  such  troubled  industries  contained  only  a  few  of  the 
tens  of  thousands  of  British  companies.  As  a  whole  these,  ir- 
respective of  the  volume  of  their  stock  issues,  had  proved 
themselves  proficient  money  makers.  Analysis  of  the  returns 
of  some  seventeen  hundred  companies  showed,  for  pre- 
depression  times,  yearly  net  profits  of  some  £200,000,000  and 
average  dividends  on  common  stock  of  more  than  10  per  cent.16 
The  emphasis  here  is  on  average;  the  profits  of  many  par- 
ticular corporations  much  exceeded  that  goodly  amount. 

The  dividends  of  leading  London  banks  ran  from  16  to  20 
per  cent;  "distinctly  gratifying,"  a  London  financier  remarked. 
There  was,  for  instance,  Bass,  Ratcliffe  &  Gretton,  Limited, 
whose  chairman,  "Colonel  the  Right  Honorable  John  Gretton, 
P.C.,  M.P.,"  announced  in  1928  a  total  yearly  dividend  of  25 
per  cent,  free  of  tax,  and  received  a  stockholders'  resolution  of 
congratulations.17  And  there  was  the  Burmah  Oil  Company, 
Limited,  of  which  Sir  John  T.  Cargill  was  chairman;  his  father 
had  started  it  in  1886  with  a  capital  of  £60,000  which  had  now 
expanded  to  nearly  £11,000,000,  with  a  market  value  almost 
five  times  that  sum.  When  Cargill  informed  stockholders  of  a 
declared  dividend  for  the  year  of  40  per  cent  subject  to  tax,  or 
30  per  cent  not  so  subject,  they  voted  thanks.  To  which  Cargill 
replied:  "Really  in  a  way  I  have  earned  a  vote  of  thanks  for 
sending  so  many  of  you  away  from  this  meeting  in  such  a 
happy  and  contented — I  won't  go  the  length  of  saying  optimis- 
tic frame  of  mind."  18  Ears  heard  the  words,  some  clear,  some 
ambiguous,  but  it  was  the  cash  that  spoke  loudest  of  all.  Again, 
there  was  the  Kamunting  Tin  Dredging  [Company]  Limited, 
with  Sir  Ernest  Birch,  chairman,  telling  stockholders  that 
on  the  company's  actual  capital,  as  it  stood  from  time  to  time, 
they  had  received  251  per  cent.19  We  note,  too,  the  Castlefield 
(Klang)  Rubber  Estate  [Company]  Limited,  with  the  stock- 
holders' enthusiasm  kindled  by  the  chairman's  report  that  the 
original  capital  subscription  had  yielded  annual  dividends  of 
per  cent;  or  a  total  benefaction  of  12Tl/2  per  cent  in 


322  AMERICA  STRIKES  BACK 

twenty-one  years.20  Further,  we  exhibit  the  British  India  Steam 
Navigation  Company,  the  nominal  annual  profits  of  which, 
according  to  an  analysis  of  its  structure,  had  been  20  per  cent 
but  actual  profits,  it  was  asserted,  were  63  per  cent.21 

These  were  but  a  few  instances  from  the  long  list  of  large 
money-makers.  Even  after  the  onset  of  the  world  depression 
there  were  corporations  operating  in  and  out  of  Britain  to  such 
profit  that  they  could  pay  12  and  16  per  cent  dividends.  If  a 
striking  instance  be  desired  of  how  perpetually  money  poured 
into  Britain,  it  is  supplied  by  the  record  of  our  old  acquaint- 
ance, the  Hudson  Bay  Company.  In  the  eighteen  years  prior 
to  1927,  the  net  profits  of  this  venerable  concern  from  land 
sales  and  fur  and  from  trading  business  in  Canada  amounted 
to  a  sum  equaling  more  than  $41,000,000.  From  all  directions 
converged  the  golden  streams.  And  now  Britain  could  view  a 
parade,  in  print  at  least,  of  its  "Kings  of  Commerce,"  a  numer- 
ous list  of  whom  was  published  in  1828,  all  fortified  with  large 
fortunes  and  many  ornamented  with  conferred  titles.22 


CHAPTER   XXII 
UNCLE  SHYLOCK 

A  NEW  cause  for  feeling  against  America  was  now  fomented 
in  Europe.  Less  than  a  decade  after  the  finish  of  the  World 
War  came  outcries  against  the  American  "economic  invasion" 
which,  it  was  represented,  was  undermining  Europe's  hold  upon 
its  own  industries.  For  centuries,  as  we  have  seen,  European 
capital  had  been  heavily  invested  in  America  and  in  many 
other  lands.  To  Europe  that  was  a  natural  and  even  a  highly 
laudable  mission  of  money.  European  financiers  had  often 
boasted  of  the  civilizing  power  of  their  capital  in  developing 
the  resources  of  unsettled  or  backward  countries.  But  now 
that  American  money  was  flowing  for  investment  into  Europe 
the  process  was  viewed  there  as  fraught  with  the  terrors  of 
an  "invasion,"  and  as  proving  the  world-conquering  aims  of 
American  money  domination. 

This  transfusion  of  American  capital  to  Europe  began  after 
1910  and  quickened  rapidly  in  post-war  years.  The  World 
War  had  changed  America's  status  from  a  debtor  to  a  creditor 
nation.  In  addition  to  the  vast  sums  loaned  by  the  American 
Government,  large  amounts  of  American  money  were  siphoned 
into  Europe  from  private  sources.  Profits  of  interlocked  Amer- 
ican banks  and  Trusts  were  so  great  that  huge  amounts  of 
investment  capital  had  accumulated.  Many  former  native  out- 
lets for  the  placing  of  such  surplus  had  begun  to  shrivel,  rail- 
road building  had  ended,  mine  working  had  reached  the  limit 
of  consuming  capacity,  factory  production  was  nearing  a  satu- 
ration point,  and  utilities  had  been  pushed  to  the  stage  of 
over-extension.  Consequently,  for  an  opportune  field  of  in- 
vestment, American  capitalists  turned  to  Europe,  disorganized 
and  crippled  by  the  war. 

For  years,  American  purchases  of  European  stocks  had  to 
be  made  in  Europe's  stock  markets.  It  was  not  until  October, 

323 


324  AMERICA  STRIKES  BACK 

1927,  that  the  New  York  Stock  Exchange  adopted  regulations 
to  facilitate  the  buying  of  British  securities.  As  American  in- 
vestments in  Europe  kept  on  mounting,  a  widespread  fear  broke 
forth  there  at  this  "economic  penetration,"  and  from  many 
sources  came  outbursts  against  the  ominous  "new  peril,"  to 
wit,  that  American  money  would  buy  up  the  world.  This  cam- 
paign had  its  multi-voiced  array  of  periodicals  and  newspapers, 
which  often  featured  cartoons  symbolizing  America  as  Uncle 
Shylock  and  which  profusely  used  the  dollar  sign  as  typifying 
America. 

To  judge  by  the  vituperative  contents  of  many  European 
papers  at  the  time,  the  subject  engrossed  nearly  all  discussion. 
Some  of  the  French  papers  were  especially  abusive  in  denun- 
ciations of  America  as  a  merciless  creditor.  In  the  more  re- 
sponsible precincts  of  the  French  Chamber  of  Deputies,  several 
speakers  professed  to  see  in  American  private  investments  a 
crafty,  iniquitous  plot  to  dominate  European  industry.  These 
declarations  were  made  in  the  debate,  in  1929,  over  the  debt 
France  owed  to  the  American  Government.  Amid  much  talk  of 
American  "financial  penetration,"  speakers  invidiously  pointed 
out  that  if  America  could  not  actually  be  classed  as  an  imperial- 
ist country,  its  gigantic  capital  funds  were  able  to  achieve  and 
were  adroitly  achieving  a  much  more  subtle  and  dangerous 
kind  of  domination  than  ever  force  would  accomplish.  And 
when,  in  Germany,  the  great  Oppel  automobile  works  came 
under  American  capitalist  control,  various  German  newspapers 
joined  with  those  elsewhere  in  Europe  in  arraigning  America 
as  deliberately  planning  to  "Americanize"  Europe.  An  Italian 
Fascist  official  added  his  voice,  stridently  protesting  against 
the  American  "imperialist  economic  invasion"  of  Europe. 

If  the  entry  of  American  investment  capital  into  Europe 
constituted  an  "invasion,"  then  what  name  was  to  be  applied 
to  the  far  greater  amount  of  European  capital  invested  in 
America?  This  was  a  point  which  Europe  did  not  even  con- 
sider. European  critics  had  often  depicted  Americans  as  a 
volatile  people,  blown  hither  and  thither  by  waves  of  sheer 
hysteria.  But  American  conduct  was  composure  itself,  along- 
side the  childish  gusts  of  hysteria  that  swept  Europe  on  the 
theme  of  "Americanization"  and  "dollar  domination." 


UNCLE  SHY  LOCK  325 

What  was  Europe's  pother  about?  Here,  again,  money  talks 
with  overwhelming  eloquence.  For,  in  comparison  with  Europe's 
foreign  investments,  America's  were  in  the  lesser  grade.  In- 
cluding American  private  loans,  the  total  American  investment 
in  Europe  reached  an  estimated  six  and  a  half  billion  dollars,1 
and  American  private  loans  throughout  the  world  perhaps 
fourteen  billion  dollars.  On  the  other  hand,  according  to  a 
statement  by  Dr.  Julius  Klein,  U.  S.  Assistant  Secretary  of 
Commerce,  investments  by  foreigners  in  American  securities 
aggregated  seven  billion  dollars. 

No  estimate  was  prepared  of  Europe's  investments  in  the 
world  at  large.  But  the  computations  of  English  economists 
give  some  accurate  idea  of  the  magnitude  of  British  invest- 
ments. These,  at  this  period,  were  placed  at  the  colossal  amount 
of  twenty-five  billion  dollars,  of  which  roughly  one-third  was 
in  America,  another  third  in  Latin  America  and  China,  and  the 
remainder  in  countries  within  the  fold  of  the  British  Empire. 
Data  set  forth  in  1931  by  Sir  George  Paish,  noted  British 
economist,  showed  that  Britain  owed  the  world  about  $750,- 
000,000,  while  the  world  owed  Britain  approximately  twenty 
billion  dollars.  There  was  a  world-burdening  yoke  which  lost 
none  of  its  weight  even  through  the  computations  of  Sir  Robert 
Kindersley,  as  published  in  "The  Economic  Journal"  for  June, 
1932.  British  capital  abroad  in  1929,  Kindersley  calculated, 
was  an  amount  almost  equaling  seventeen  billion  dollars,  from 
which  was  derived  a  yearly  income  of  nearly  a  billion  dollars. 
The  returns,  of  course,  fell  off  with  the  spread  of  the  great 
world  depression. 

The  scare  racking  various  European  countries  over  Amer- 
ican economic  conquest  was  grounded  upon  the  assumption 
that  those  inroads  were  wholly  aggressive.  But  in  some  cases 
American  planning  and  capital  were  either  welcomed  or  eagerly 
sought.  For  instance  Italy,  lacking  coal  deposits,  had  pressing 
need  to  develop  its  hydro-electric  resources;  and  so,  with  its 
own  industrialists  unable  or  unwilling  to  do  the  work,  the 
services  of  American  capitalists  were  enlisted.  More  than  one- 
half  of  American  direct  investments  in  Italy  were  in  public 
utilities. 

Can  anyone  doubt  that  if  American  corporations  had  ever 


326  AMERICA  STRIKES  BACK 

abridged  or  negatived  the  rights  of  foreign  stockholders  there 
would  have  arisen  loud  condemnations  of  American  chicanery? 
What  floods  of  revilement  would  then  have  broken  forth!  But 
now,  in  one  European  country  after  another,  measures  were 
taken  to  nullify  or  curtail  powers  of  American  stockholders. 
American  direct  investments  in  France,  largely  in  industries, 
amounted  to  $145,000,000.  Under  the  plea  of  patriotic  solici- 
tude a  number  of  companies  in  France  peremptorily  altered 
their  by-laws  so  as  to  give  plural  voting  to  certain  kinds  of 
shares,  and  incorporated  provisions  to  confine  ownership  of 
these  favored  shares  to  Frenchmen.  Most  of  the  sum  of 
$139,000,000  of  American  direct  investments  in  Germany  was 
in  industries.  Some  corporations  there  quickly  set  about  re- 
lieving the  panicky  general  state  of  mind  over  American  "in- 
vasion" by  adopting  omnibus  restrictions.  One  hundred  times 
the  voting  power  of  common  shares  was  vested  in  certain 
preferred  shares  which  were  held  by  the  management  or  by 
persons  closely  affiliated.  In  Britain,  which  had  attracted  one- 
third  of  the  direct  American  investments  in  Europe,  drastic 
measures  were  taken  in  a  number  of  cases.  The  General  Electric 
Company,  in  1928,  divested  all  foreign  stockholders  of  voting 
rights;  two  other  British  companies  inserted  clauses  in  their 
by-laws  restricting  foreign  stock  holdings  to  25  per  cent;  three 
other  such  companies  disfranchised  foreign  shareholders  or 
limited  voting  rights  to  British  stockholders;  no  foreigners 
were  allowed  to  hold  shares  in  Imperial  Airways.2 

Yet  in  the  frenzy  of  denunciation  of  American  industrialists 
a  few  temporizing  voices  sought  to  make  themselves  heard. 
Viscount  Rothermere,  a  wealthy  British  publisher-editor,  burst 
out  with  "Will  Wall  Street  Swallow  Europe?"— an  article 
published  in  "The  Sunday  Pictorial"  of  London.  Wall  Street 
he  pictured  as  another  world  power,  wielding  more  authority 
than  the  League  of  Nations  and  having  "more  subtlety  than 
bolshevism  [has] ."  But,  with  profound  reverence  for  the  finan- 
cial might  demonstrated  by  Wall  Street,  he  sagaciously  coun- 
seled making  terms  with  it  instead  of  giving  vent  to  purpose- 
less resentment.  British  industrialists  were  in  business  to  make 
money,  and  they  might  as  well  recognize  the  ability  of  Amer- 


UNCLE  SHY  LOCK  327 

ican  industrialists  to  remedy  the  slackness  of  British  methods: 
"When  the  present  glut  of  capital  in  America  produces  a  surplus 
we  should  do  everything  possible  to  attract  it,  together  with 
American  technical  skill  and  experience  to  the  task  of  revital- 
izing and  developing  depressed  British  industries.  This  is 
Britain's  shortest  road  to  industrial  recovery.  .  .  ."  Then,  after 
repeating  the  old  assertion,  "Work  and  money-making  are 
almost  the  sole  interests  of  the  entire  American  nation,"  he 
went  on  with  silky  persuasiveness  to  convince  his  readers  that 
American  industrialists  made  a  passion  of  business,  and  that 
their  methods  were  worthy  of  note. 

Commonly,  as  we  have  seen,  British  critics  scored  American 
industrialists  as  being  shackled  to  business.  But  in  Rother- 
mere's  view  their  concentration  was  the  one  thing  needed  to 
pull  British  business  out  of  its  slump.  "They  have  few  hobbies, 
no  leisure  class,  and  rarely  retire  from  business.  And  the  presi- 
dent of  any  one  of  a  score  of  American  corporations  is  a 
greater  figure  than  any  political  president  or  Prime  Minister 
in  Europe."  To  strengthen  his  panegyric  of  American  business 
methods,  Rothermere  stretched  a  particle  into  a  sweeping 
fact.  "Statistics  and  salesmanship  are  the  scientific  hobbies  of 
the  nation."  Should  not  Britain,  Rothermere  intimated,  pru- 
dently turn  to  the  rising  golden  sun  and  conform  its  policies 
thereto?  America,  he  proclaimed,  was  attaining  the  "financial 
empire  of  the  world."  Did  not  Britain's  supreme  interest  re- 
quire the  cultivating  of  good  relations  with  that  financial  giant? 
So,  advocating  the  need  of  affinity  with  big  money,  Rothermere 
advised:  "By  closer  co-operation  with  the  United  States,  by- 
copying  their  modern  methods,  and  securing  their  friendly  aid, 
we  shall  be  using  the  best  means  to  extricate  an  older  and 
hardly-tried  economic  organization  from  the  difficulties  which 
so  perilously  beset  it."  Specifying  the  disqualification  of  Amer- 
ican stockholders  from  voting,  Rothermere  pleaded  for  the 
removal  of  all  handicaps  on  the  investment  of  American  capital 
in  Britain. 

The  extent  of  the  "American  invasion"  in  Britain  had  been 
greatly  overestimated,  stated  "The  Economist"  on  June  22, 
1929.  And,  it  warned,  the  fettering  of  American  stockholders 


328  AMERICA  STRIKES  BACK 

was  an  impolitic  course  likely  to  provoke  reprisals  which,  if 
successful,  would  deal  a  damaging  blow  to  the  whole  British 
economic  structure. 

We  must  linger  a  moment  on  another  aspect  of  America's 
over-seas  "invasion."  There  long  had  been,  and  through  the 
1920's  there  continued  in  growing  volume,  an  American  influx 
which  European  countries  viewed  as  an  invasion  of  their 
privacy,  while  at  the  same  time  they  took  every  possible  step 
to  augment  it.  This  incursion  was  the  American  tourist  traffic — 
"tourism,"  as  it  was  termed  in  Europe.  The  Governments  of 
nearly  all  European  countries  took  official  measures  to  en- 
courage and  drum  up  the  traffic,  each  aiming  to  get  for  its 
country  as  much  of  the  American  tourist  visitation  as  it  could. 
In  New  York  alone,  tourist  information  offices  were  maintained 
by  the  travel  bureaus  or  State  railways  of  thirteen  European 
nations. 

While  European  critics  were  deriding  Americans  as  money- 
loving,  Europe  through  a  series  of  years  was  gladly  pocketing 
a  total  of  hundreds  of  millions  of  American  tourist  money. 
The  year  1929,  though  not  the  best,  will  be  offered  as  exhibit. 
American  tourists,  it  was  estimated,  expended  in  that  year 
$839,000,000  on  travel  outside  their  own  continent.  Of  that 
sum  France  battened  on  an  estimated  $137,000,000,  Italy 
$30,433,000,  Germany  $44,676,000  and  Britain  almost  $42,- 
000,000.3 

Above  all  countries  France  had  a  thrifty,  most  astute  sense 
of  how  to  exploit  its  "touristic  capital" — its  antiquities,  art 
treasures,  and  so  on.  France  spent  large  sums  in  official  pub- 
licity to  attract  tourists.  These,  however,  were  only  part  of  the 
American  influx.  A  United  States  Government  report  in  1928 
gave  American  consular  figures  vouched  for  as  "fairly  ac- 
curate," indicating  that  77,063  Americans  lived  abroad  in  per- 
manent or  semi-permanent  residence  in  France,  Great  Britain 
and  Italy.  An  arbitrary  net  estimate  of  the  amounts  spent 
mainly  in  those  countries  by  wealthy  American  residents,  by 
American  heiresses  married  to  foreigners,  and  by  American 
students,  was  $32,000,000.4  Ai  the  precise  time  when  "The 
Osservatore  Romano"  and  other  Italian  newspapers  were  de- 


UNCLE  SHYLOCK  329 

nouncing  American  "dollar  superiority"  and  "materialistic 
leadership,"  Mussolini's  Italian  Government  was  bending 
every  effort  to  attract  more  American  tourists,  or  rather  the 
money  they  brought  to  Italy.  These  funds,  together  with  the 
large  total  of  remittances  sent  to  relatives  by  a  mass  of  Italian 
immigrants  in  America,  were  an  important  consideration  in 
Italy's  finances. 

When,  in  the  years  following  1929,  the  American  tourist 
traffic  to  various  European  countries  abruptly  dropped,  much 
perturbation  ensued  there.  During  the  same  time,  too,  when 
the  dollar  was  devalued  and  Americans  resident  in  Europe 
were  allowed  less  native  currency  in  exchange,  many  of  these 
domiciled  visitors,  unable  to  afford  the  difference,  returned  to 
America.  Under  the  lamenting  caption  of  "The  Fall  of  Our 
National  Wealth,"  the  Paris  journal  "Figaro,"  early  in  1935, 
showed  to  what  a  serious  extent  that  wealth  had  been  impaired 
by  the  decline  in  the  number  of  visitors.  Of  all  European  nations 
the  French  seem  to  have  experienced  the  keenest  pocket  grief 
from  the  tourist  slump.  In  their  anxiety  to  retain  American 
customers,  French  hotel  keepers  made  a  belated  concession: 
they  agreed  to  forego  the  prevailing  rate  of  15  francs  for  the 
dollar  and  make  exchange  at  the  old  rate  of  20  francs.  From 
Britain,  in  the  dawn  of  1935,  came  an  official  Home  Office 
expression  of  satisfaction  at  the  first  increase  of  American 
tourists  there  since  the  depression  began — an  entry  of  56,000 
of  them  in  1934.  These,  together  with  Dominion,  Continental 
and  week-end  visitors  to  Britain,  called  forth  the  jubilant 
statement  that  "Britain  can  add  the  personal  expenditures  of 
400,000  guests  to  her  invisible  revenue  for  1934." 

Meanwhile,  the  raiding  of  America  by  European  critics  had 
continued,  but  in  greater  force  than  ever  before.  "The  trouble 
with  most  Americans  is  that  they  honestly  believe  they  are 
better  than  the  man  of  other  lands  because  they  have  more 
worldly  goods."  Thus  did  Andre  Tardieu,  a  noted  French 
political  figure,  express  himself  in  1927.  Never  had  there  been 
such  a  procession  of  critics  as  now  fluttered  in  America  for  a 
brief  span  and  then  launched  their  attacks.  Added  to  these 
were  squibs  by  European  writers  who  had  not  even  skimmed 


330  AMERICA  STRIKES  BACK 

any  part  of  America;  they  followed  the  short-cut  process  of 
remaining  at  home  and  taking  their  conclusions  from  books 
at  hand. 

One  of  the  most  notable  contributions  to  the  library  of  abuse 
was  by  Georges  Duhamel,  a  Parisian  journalist.  His  book,  a 
rabid  indictment  of  American  life,  brought  out  in  France  with 
the  title  "Scenes  Out  of  the  Future/'  accorded  so  thoroughly 
with  the  prepossessions  of  academic  pundits  in  Paris  that 
Duhamel  was  awarded  the  Grand  Prix  du  Roman  by  the  French 
Academy.  Well-informed  Frenchmen  know  how  many  a  prize 
has  been  given  to  fugacious  authors,  or  for  books  of  no  intrinsic 
worth.  But  the  announcement  of  the  conferring  of  this  token 
upon  Duhamel  was  exploited  in  America  as  the  granting  of  an 
illustrious  honor.  Forthwith,  in  1931,  a  prominent  Boston  pub- 
lishing house  put  out  an  American  edition  of  Duhamel's  book, 
under  the  lurid  main  title  "America  the  Menace." 

Some  American  reviewers  of  this  book  happened  to  be 
sophisticates,  who  had  served  as  newspaper  correspondents 
abroad,  and  so  had  joined  to  their  knowledge  of  America  a  fair 
understanding  of  conditions  in  Europe.  They  severely  criticized 
Duhamel's  production  as  superficial  and  tawdry.  They  could 
well  had  added  that  it  was  in  essence  only  a  modernized  imita- 
tion of  the  long  series  of  derogatory  books  stretching  back  for 
more  than  a  century.  The  menace  which  Duhamel  saw  coming 
out  of  America  was  only  a  variation  of  the  "American  invasion" 
vagary  then  overrunning  Europe.  Instead  of  construing  the 
invasion  in  economic  terms,  he  transposed  it  to  the  cultural 
field.  He  pictured  the  spread  to  France  and  to  other  European 
countries  of  a  noxious  type  of  civilization,  of  which  America 
seemed  to  him  the  archetype  and  the  malignant  promoter. 

Duhamel's  personal  acquaintance  with  America  was  nothing 
more  than  that  afforded  by  the  brief  sojourn  of  a  "flying  trip." 
He  had  followed  the  routine  performance  of  scanning  some 
exterior  evidences — stockyards,  skyscrapers,  and  the  fluff  and 
froth  of  life  in  a  few  cities.  Over  these  sights  he  moralized  in 
lugubrious  mood.  American  moving  pictures  filled  him  with 
sadness.  They  were  "a  pastime  for  slaves,  an  amusement  for 
the  illiterate,5  for  poor  creatures  stupefied  by  work  and  anx- 
iety." They  were  "the  skilfully  poisoned  nourishment  of  a 


UNCLE  SHY  LOCK  331 

multitude  that  the  powers  of  Moloch  have  judged  and  con- 
demned, and  whose  degradation  they  are  finally  accomplish- 
ing." These  are  fair  specimens  of  his  diatribe  throughout  the 
book.  Most  rabid  of  all  his  onslaughts  was  his  invective  against 
the  automobile  in  America.  It  had  spoiled  and  ruined  space; 
"there  is  no  longer  any  solitude,  any  silence,  any  place  of 
refuge." 

Automobiles,  had  he  cared  to  recall  it,  were  made  in  France 
before  they  were  made  in  America;  and  France,  as  we  have 
heretofore  noted,  had  its  big  automobile  works  striving  to  make 
mass  sales  to  the  French  people.  At  the  date  when  Duhamel 
was  preparing  his  book,  the  French  Government,  to  provide 
wider  facilities  for  automobile  traffic,  was  planning  a  progres- 
sive four-year  road  development  in  its  colony  in  Algeria.  Not 
only  there  but  in  Dahomey  and  Senegal,  largely  or  wholly 
French  possessions,  the  names  of  which  had  long  signified  little 
other  than  tales  of  primitive  travel  and  colorful  adventure, 
roads  were  constructed  for  the  speeding  automobile. 

There  arose  an  informed  French  critic  who  ridiculed  Du- 
hamel's  book.  He  was  a  man  who  had  a  proper  understanding 
of  America — Professor  Bernard  Fay,  holder  of  the  chair  of 
American  Civilization  in  the  College  de  France.  To  Andre 
Siegfried  alone  of  all  current  French  writers  on  America,  Fay 
credited  an  effort  at  fairness,  but  he  criticized  even  Siegfried  as 
failing  to  grasp  the  personality  or  life  of  the  American  people. 
Fay  explained  how  groups  of  French  writers  had  been  in- 
fluenced by  the  translations  of  American  books  published  in 
France.  Those  written  by  Sinclair  Lewis,  Henry  L.  Mencken, 
Upton  Sinclair  and  like  authors  had  sunk  readily  into  the 
mentality  of  the  French  literati.  "Outstanding  French  writers 
felt  impelled  to  interpret  in  a  pungent  and  brilliant  book"  the 
ideas  set  forth  by  American  satirists  and  reformers,  and  so 
there  came  "a  veritable  deluge  of  French  books  on  America." 
Fay  injected  a  dash  of  irony:  In  answer  to  accusations  that  he 
did  not  know  America,  Duhamel  could  have  offered  the  defence 
that  even  though  he  had  been  in  America  but  a  few  weeks  "he 
knew  American  civilization  as  the  best-known  [American] 
writers  had  described  it.  Mencken,  Lewis  et  al  were  his 
sources."  Fay  went  on:  "As  a  matter  of  fact,  M.  Duhamel,  in 


332  AMERICA  STRIKES  BACK 

his  short  stay  in  America,  had  been  impressed  with  a  few  things 
that  were  new  to  him,  and  he  was  all  the  more  impressed  be- 
cause they  were  unexpected.  He  was  slightly  ill,  he  was  tired 
and  nervous,  and  so  he  hated  them  all,  largely  because  they 
were  so  different  from  what  he  was  accustomed  to  seeing.  .  .  . 
Everything  that  differed  from  what  he  saw  every  day  in  Paris 
he  called  ' American  civilization'."  There  we  have  the  pivotal 
point;  Duhamel  judged  America  by  Paris,  and  not  probably 
the  whole  of  Paris,  but  only  by  that  elect  section  of  it  in  which 
he  lived.  So  swayed,  Fay  further  noted  of  Duhamel,  "with  the 
help  of  Mencken,  Frank,  Lewis,  and  Sinclair,  he  was  able  to 
define  'American  civilization'  in  a  surprisingly  clear  and  satis- 
factory manner."  6 

The  furious  French  vogue  of  attacking  America  propagated 
a  variety  of  freak  books.  One  of  these,  by  two  downy  French- 
men, was  entitled  "La  Cadavre  Americain"  (The  American 
Corpse).  Its  point  was  simple:  After  a  European  had  visited 
America,  the  fact  that  he  had  suffered  that  tribulation  could 
be  read  instanter  from  his  sad  expression!  To  Americans  this 
belonged  in  the  realm  of  farce,  but  there  were  Frenchmen  who 
accepted  it  as  more  weighty  evidence  in  a  pile  of  accusation. 

Any  Frenchman  who  did  not  read  books  could  find  fearsome 
articles  on  America  in  his  newspapers  and  magazines.  Paul 
Morand  was  considered  a  leading  French  writer  of  travel  books. 
His  qualifications  were  evinced  by  his  volume  "New  York." 
Taking  "America,  the  land  of  speed"  as  his  text,  Morand 
spread  his  jeremiad  in  "La  Nouvelle  Revue  Frangais"  of  Paris. 
He  saw  no  distinction  between  speed  in  the  pursuit  of  recreation 
and  enforced  speed  in  the  industrial  domain;  all  speed  was 
alike.  He  did  not  seem  to  comprehend  America  as  a  country 
of  vast  distances  where  speed  for  business  or  other  reasons 
was  both  a  need  and  a  saving  of  time  and  energy.  To  him 
speed  was  a  horror.  Yet  it  had  not  always  been  so;  once,  he 
admitted,  he  had  loved  speed,  but  "later  not  so  much."  Now 
the  spectacle  of  twenty  million  automobiles  in  America  ap- 
palled him.  A  man's  philosophy  of  life,  one  would  think,  may 
admit  pros  and  cons  on  the  question  of  speed.  But  for  Morand 
there  was  no  middle  ground.  He  vaulted  into  bygone  times, 
and  became  merely  one  more  romancer  mooning  over  the  sup- 


UNCLE  SHYLOCK  333 

posed  glories  of  the  past.  "Speed  is  overturning  all  our  old 
customs.  We  are  throwing  overboard,  one  after  another,  the 
slow  tools  of  the  past — horses,  cooking  over  a  slow  fire,  polite- 
ness. .  .  .  Speed  is  disjointing  our  old  world."  Morand  implied 
that  America  was  clearly  responsible  for  this  decadence. 

It  was  in  America,  where  the  speeding-up  system  in  factories 
originated,  that  mitigations  for  it  were  devised.  In  America 
itself  this  system,  called  the  efficiency  or  scientific  system,  was 
scathingly  denounced  by  labor  leaders  and  humanitarians  as  a 
cruel  means  of  exploitation.  While  foreign  critics  still  thought 
that  this  system  functioned  as  when  first  operated,  it  had  mean- 
while undergone  one  notable  change.  Agitation  and  capitalist 
concession  had  brought  measurable  mitigation  by  securing  the 
five-day  week  in  industry.7 

Among  the  American  phenomena  that  evoked  the  scorn  of 
satirical  native  writers  were  the  business  men's  organizations — 
the  "rotarians"  sleek  with  stuffy  self-importance  and  prosy 
with  office  cant.  Yet  France,  whither  the  American  intellectual 
fled — when  he  could  afford  it — for  a  change  of  atmosphere, 
could  show  a  fine  array  of  specimens  to  whom  also  "business 
was  business."  Although  their  veneer  was  different,  their  core 
was  the  same.  France's  one  hundred  and  forty-three  Chambers 
of  Commerce  were  so  many  sanctums  consecrated  to  the  high 
god  of  trade.  France's  network  of  twenty-six  large  employers' 
groups,  welded  in  a  single  all-potent  national  organization, 
embraced  the  leading  figures  in  French  industry  and  com- 
merce. Various  of  these  factory  owners  had  installed  the  speed- 
ing-up system,  but,  unlike  a  considerable  number  of  American 
industrialists,  they  in  the  main  resisted  every  plea  and  defeated 
every  effort  to  modify  its  exactions.  From  the  National  Con- 
gress of  the  French  Confederation  of  Labor  came  denuncia- 
tions. "As  regards  scientific  management,"  one  resolution  de- 
clared, "the  Congress  protests  against  the  growing  abuses 
resulting  from  the  application  of  the  new  methods  by  the  em- 
ployers in  a  selfish  and  inhuman  spirit."  Recounting  how  the 
system  mercilessly  overworked  men,  women  and  children, 
plunged  workers  into  greater  hardships  by  wage-cuts,  and 
spread  despair  by  throwing  many  others  out  of  employment, 
the  resolution  went  on:  "The  employers  in  most  cases  per- 


334  AMERICA  STRIKES  BACK 

sistently  reject  all  suggestions  made  by  the  trade  unions  with 
a  view  to  reducing  or  averting  the  dangerous  consequences 
likely  to  result  from  such  measures";  (the  speeding-up  sys- 
tem).8 

Here  was  furnished  a  picture  of  an  industrial  France  un- 
relieved by  even  such  palliative  measures  as  had  been  exten- 
sively adopted  in  America.  Objectors  to  American  standard- 
ization, Morand  himself  later  conceded,  failed  to  realize  that 
Europe  now  had  all  of  the  drawbacks  and  none  of  the  advan- 
tages. Like  those  of  other  countries,  French  industrialists  had 
long  enriched  themselves  from  the  labor  of  women  and  chil- 
dren. Thirty  years  back  more  than  a  million  of  the  three  million 
employes  in  French  industry  were  women  and  children,9  and 
the  pace  at  which  continuing  numbers  were  worked  grew  ever 
more  fatiguing.  Repeatedly  did  the  women  protest,  but  with- 
out redress.  "Women's  wages  are  unfairly  low,  and  many 
women  workers  are  subjected  to  the  intense  and  abnormal 
overwork  resulting  from  a  combination  of  maternal,  domestic 
and  industrial  life.  .  .  .  Men,  women  and  children  are  ranged 
in  a  competitive  battle  in  the  factory.  There  must  be  an  effec- 
tive transformation  in  the  social  conditions  of  men  and  women 
workers."  Thus  was  voiced  a  resolution  of  the  women  workers 
at  the  annual  convention  of  the  French  General  Confederation 
of  Labor  in  Paris,  in  1929.10 

Exaltations  of  France  aimed  to  give  it  a  distinctive  eclat  of 
artistic  excellence,  and  all  things  not  fitting  in  with  this  pur- 
pose were,  of  course,  suppressed  as  non-existent.  The  discour- 
agements and  privations  often  suffered  by  French  painters  was 
a  familiar  story  to  all  who  knew  the  undercurrents  of  French 
art.  Recognition  brought  its  posthumous  evils.  The  higher  the 
standing  attained  by  artists,  the  more  certain  the  prospects 
after  their  death  of  outrages  committed  in  the  name  of  their 
art.  That  excellence  for  which  they  had  toiled  was  made  the 
ground  for  obtaining  large  sums,  a  fraction  of  which  would  have 
joyously  lightened  the  burden  of  the  artist  during  his  lifetime. 
From  time  to  time,  scandals  had  unmasked  the  forgery  in 
France  of  paintings  that  purported  to  be  the  work  of  renowned 
artists.  This  counterfeiting  of  modern  art  was  an  industry 
peculiarly  flourishing  in  France,  because  its  prestige  as  a  pro- 


UNCLE  SHYLOCK  335 

ductive  art  country  enabled  the  perpetrators  to  impose  upon 
confiding  buyers.  Only  recently  (in  1935)  has  come  another 
and  large  disclosure,  with  the  arrest  and  conviction  of  two 
principals  accused  of  running  an  "art  factory"  from  which  had 
gone  hundreds  of  pictures  bearing  the  names  of  Millet,  Corot, 
Manet,  Monet  and  other  well-known  artists.  Quantities  of  these 
paintings,  the  prosecution  charged,  had  been  bought  by  art 
museums  and  private  art  collectors  mainly  in  England  and 
America;  nearly  five  years  of  investigation  had  been  required 
to  trace  the  ramifications  of  the  swindle.  One  of  the  accused 
was  Jean  Charles  Millet,  grandson  of  the  painter.  Specifically 
proved  guilty  of  having  sold  paintings  falsely  represented  as 
those  of  the  famous  Millet,  he  and  an  accomplice  were  sentenced 
to  six  months  in  prison,  subjected  to  a  fine,  and,  together  with 
the  former  wife  of  one  of  them,  were  condemned  to  pay  120,000 
francs  damages  to  the  dealer  who  originally  made  complaint. 

But  one  more  instance  will  be  cited  of  the  post-war  French 
reviling  of  America.  Indeed,  the  only  reason  for  giving  any 
attention  to  Lucien  Lehman's  extravaganza  of  abuse,  "The 
American  Illusion,"  is  because  it  supplies  a  particularly  con- 
spicuous example  of  the  use  that  was  made  of  old  accusations. 
Unlike  virtually  all  of  his  French  fellow-authors,  Lehman  had 
lived  five  years  in  an  American  city — New  York — where  he 
had  been  correspondent  for  a  Paris  newspaper.  Yet  the  op- 
portunities he  had  thus  had  for  studying  and  understanding 
American  life  were  in  no  iota  evidenced  in  his  book.  A  trans- 
lation was  put  forth  in  1931  by  a  New  York  publishing  house, 
and  was  advertised  as  the  fresh  and  timely  observations  of  a 
knowing  and  acute  critic. 

Lehman  painted  Americans  as  a  race  of  "bigots,"  a  people 
"ignorant  of  its  own  history"  and  "drunk  with  pride  and 
chauvinism."  The  American  man  was  "ignorant  and  brutal"; 
he  "fought  on  the  slightest  provocation."  American  children 
were  "the  most  ill-mannered  and  disagreeable  on  the  face  of 
the  earth."  As  a  race  Americans  were  "vain"  and  insufferable 
"egoists."  They  were  a  "young  nouveau  riche  nation,"  a  "victim 
of  the  grandeur  mania,"  governed  by  "sharp  and  sordid  Shy- 
locks." 

Lehman  emphasized:  "Money,  I  repeat,  is  the  only  thing  in 


336  AMERICA  STRIKES  BACK 

America  that  will  assure  one  a  great  name  and  lasting  glory." 
To  the  progressive  American  political  movements  which,  with 
but  temporary  intermissions,  had  for  years  attacked  the  powers 
and  privileges  of  great  wealth,  Lehman  paid  no  attention. 
Apparently  he  was  intentionally  ignorant  of  the  continuing  line 
of  investigations,  and  of  the  books  elucidating  the  frauds  and 
thefts  by  which  great  American  fortunes  had  been  amassed. 
This  exploration  into  the  genesis  of  fortunes  was  a  strictly 
American  accomplishment.  No  European  country  had  any 
literature  even  faintly  resembling  that  which,  in  America,  ex- 
humed and  set  forth  the  truth  as  to  sources  of  plutocratic 
wealth  from  its  beginnings  to  its  zenith.  Yet  with  preposterous 
certitude  Lehman  went  on:  "A  permanent  halo  can  come  only 
to  the  founder  of  fortunes  so  huge  that  they  make  one  dizzy 
to  think  of  them — and  the  origins  of  which  are  never  dis- 
cussed." He  descried  a  lack  of  "moral  excellence"  in  American 
men  and  women;  sporadic  corruption  in  America  he  stretched 
into  corruption  rooted  as  "a  general  usage";  and  in  the  same 
style  he  ladled  much  more  of  his  accumulated  vilification.11 

At  this  identical  time,  however,  large  sections  of  the  French 
public  were  intensely  wrought  up  over  charges  of  venality  on 
the  part  of  their  public  men;  French  taxpayers  were  com- 
plaining of  official  inefficiency  and  malfeasance;  and  in  the 
memory  of  many  French  investors  the  fraudulent  depredations 
of  the  Oustric  bank  were  poignantly  fresh.  All  of  these  griev- 
ances came  to  a  climax  with  the  disclosure,  in  1933,  of  the 
great  swindle  consummated  by  Serge  Alexandre  Stavisky  upon 
small  French  investors.  The  circumstances  of  this  scandal  over- 
shadowing France  are  matters  of  too  current  knowledge  to  call 
for  detailed  narrative.  Nevertheless,  it  is  essential  to  point  out 
a  few  significant  features  which  in  the  accounts  were  either 
obscured  or  unnoticed. 

America  had  its  constant  swindling  by  successions  of 
sharpers;  billions  of  dollars  had  been  filched  from  investors 
by  sundry  corporations  and  investment  bankers  in  selling 
worthless  securities.12  This  had  been  done  not  by  favor  of  law 
but  despite  many  drastic  Federal  and  State  laws.  And  no 
official  corruption  was  involved.  Yet  the  American  habit  of 
viewing  conditions  in  Europe  as  blissfully  "different"  was  again 


UNCLE  SHYLOCK  337 

shown  by  the  report  of  the  United  States  Senate  Committee  on 
Banking  and  Currency  dealing  with  the  sale  of  worthless  stocks. 
"England,  France,  Belgium,  Germany  and  other  countries," 
the  report  idealized,  "have  long  had  comprehensive  statutes  to 
meet  precisely  the  same  problem  with  which  we  are  confronted." 
Such  a  statement  was  not  only  grossly  untrue  both  in  substance 
and  implication,  but  it  happened  to  be  published  at  the  precise 
time  (in  1933)  when  the  Stavisky  frauds  became  public. 

But  what  was  the  spectacle  in  France?  There  again,  in  the 
person  of  Stavisky,  was  an  instance  of  one  long  known  to 
officials  as  a  slippery,  suave  and  audacious  crook,  yet  nonethe- 
less allowed  to  perpetrate  the  enormities  of  his  prime  without 
the  slightest  hindrance.  In  all  probability  there  was  not  an 
important  government  functionary  in  Paris  who  did  not  know 
of  Stavisky's  criminal  career,  his  past  jail  sentences,  and  the 
appellation  "king  of  the  crooks"  fixed  upon  him  by  at  least  one 
Paris  newspaper.  Certainly  police  officials  had  his  record.  Yet 
he  was  authorized  to  embark  in  a  business  which  had  been 
peculiarly  costly  to  French  investors — that  of  selling  bonds. 
His  wares  were  municipal  pawnshop  bonds,  of  which  he  forged 
great  quantities.  His  ascertainable  receipts  from  a  mass  of 
victims  amounted  to  259,000,000  francs. 

Prevalent  suspicions  of  official  connivance  and  corruption 
intensified  popular  fury,  and  on  February  6,  1934,  a  great  and 
raging  demonstration  overflowed  in  Paris  streets.  On  the  de- 
fensive, the  French  Cabinet  now  resorted  to  a  plea  which  was 
not  immediately  recognized  by  the  public,  either  in  France  or 
elsewhere,  for  what  it  was — an  old  ruse  of  cornered  French 
officials.  Although  conservatives  and  radicals  alike  had  joined 
in  the  demonstration,  Government  spokesmen  declared  it  to 
be  of  royalist  instigation.  The  same  charge  of  royalist  con- 
spiracy was  made  by  officialdom  many  years  previously  when 
the  Panama  corruption  was  exposed.  Now  in  the  1934  up- 
heaval, upon  the  ground  that  "the  security  of  the  State  was 
menaced"  by  "foes  of  the  Republic,"  the  French  Premier 
ordered  out  troops  to  reinforce  the  police  in  overcoming  the 
angry  crowds.  Sabreing  and  shooting  killed  nineteen,  and  in- 
jured more  than  eight  hundred,  persons.  Public  wrath  forced 
the  resignation  of  the  Cabinet. 


338  AMERICA  STRIKES  BACK 

Was  any  moral  to  be  drawn  from  the  Stavisky  frauds?  The 
"Mercure  de  France,"  of  Paris  (December  15,  1933),  had 
published  a  comprehensive  article  by  G.  Welter  on  the  French 
character  and  French  propensity  for  taking  financial  risks  that 
offered  prospects  of  inordinate  gain:  "Billions  [of  francs],"  he 
wrote  "are  thrown  every  year  into  the  abyss  of  gambling,  stock 
exchange  speculations,  horse  racing,  et  cetera.  .  .  .  Nothing 
will  stop  the  perpetual  movement  .  .  .  only  sometimes  the 
movement  slows  down  under  the  influence  of  a  new  crash  or 
financial  scandal.  Soon,  however,  the  woolen  stocking  gets  tired 
of  being  filled  without  profit  and  empties  itself,  whereupon  the 
game  begins  afresh.  No  lesson,  be  it  ever  so  painful,  is  of  any 
avail.  The  Frenchman  sighs  over  his  losses  and  begins  again." 


CHAPTER  XXIII 
REVAMPING  THE  OLD  THEME 

THE  rounding  of  this  narrative  requires  a  final  dealing  with 
more  of  the  swarm  of  America's  assailants.  That  many  of  these 
enjoyed  but  a  fleeting  reputation  is  all  the  more  reason  why 
they  should  be  noticed  here.  For  they  were  the  popularly-read 
and  much-quoted  writers;  and  however  little  known  or  un- 
known some  or  all  of  them  may  be  in  receding  time,  their  pro- 
nouncements received  wide  publicity  in  their  own  day.  It  was 
the  total  effect  of  their  writings  (often  translated  into  other 
languages)  which  supplemented  and  further  solidified  the  mass 
of  older  adverse  criticisms.  Hear  the  "Commercio"  of  Lima, 
Peru,  stating  the  case  early  in  1929: 

"It  is  generally  assumed  in  South  America  that  the  Yankees 
are  grim,  commercialized,  all  of  a  piece.  ...  In  the  Southern 
continent  of  the  Western  Hemisphere  a  Yankee  is  conceived 
to  be  a  creature  who  swaggers,  a  husky  being,  florid  of  com- 
plexion as  of  speech,  his  mouth  conspicuous  through  a  pipe  too 
big,  his  brow  frowning,  his  vocabulary  limited,  peremptory  in 
his  talk,  asking  much,  giving  little,  intolerant,  mechanical  in 
his  movement  as  in  his  ideas,  plenty  of  money  in  his  purse  .  .  . 
his  sole  watchword  and  motive  summed  up  in  the  familiar  slogan 
that  business  is  business."  These  ideas,  the  "Commercio" 
pleaded,  were  absurdly  erroneous.  But  its  attempts  to  correct 
a  grounded  conviction  were  futile  in  a  continent  which  long 
had  absorbed  its  fantasies  from  a  host  of  writings  either  in  the 
original  or  in  translations. 

At  this  time  there  went  to  South  America  one  of  America's 
most  voluminous  critics,  there  to  add  to  the  force  of  the  pre- 
vailing attitude  by  a  series  of  lectures  on  the  American  people. 
He  was  Count  Hermann  Keyserling,  who  had  already  revealed 
his  posture  and  his  literary  methods  in  his  book  "Europe,"  a 
translation  of  which  had  been  brought  out  in  New  York.  "A 

339 


340  AMERICA  STRIKES  BACK 

more  accurate  title,"  commented  Professor  Paul  Monroe  of 
Columbia  University,  "would  be  i Count  Keyserling  and  his 
Europe.'  For  this  Europe  is  probably  the  Europe  of  no  other 
observer.  .  .  .  Count  Keyserling  includes,  with  many  absurd 
generalizations  about  European  peoples,  much  that  is  prob- 
ably apt  and  true  about  individual  nationals  of  the  countries 
concerned,  creating  an  illusion  of  comprehensive  intimacy  out 
of  the  minutiae  of  character  criticism."  x  Keyserling  represented 
himself  in  this  book  as  the  aristocrat  censoriously  viewing  the 
ineptitudes  of  democracy;  he  chanted  the  glories  of  aristocracy 
and  extolled  "the  truly  superior  persons"  as  the  only  possessors 
of  wisdom  and  culture. 

Not  for  more  than  fifteen  years  had  Keyserling  visited  Amer- 
ica. This  long  absence  did  not  stop  him  from  profusely  writing 
about  it — though  he  did  indeed  begin  one  long  article  with  an 
apology  for  doing  so  despite  his  long  absence.  But  with  this 
preliminary  to  ward  off  criticism,  he  set  about  giving  his  "vision 
of  America's  future,"  and  he  passed  judgment  as  though  he 
had  the  most  intimate  knowledge  of  America's  present  and  a 
crystalline  prescience  of  its  future.  In  sermonic  style  he  directed 
how  America  should  act.  "America  will  have  to  learn  that  if 
equality  is  good,  quality  is  better."  "It  will  have  to  spend 
leisure  nobly."  Such  were  exhibitions  of  his  high-sounding 
preachments,  all  revolving  around  his  concept  of  an  America 
debased  by  materialism.  What  especially  emerged  from  this 
jungle  of  words?  He  foresaw  "the  dawning"  of  a  new  Dark 
Age.2 

When  later  he  did  illumine  America  with  his  presence,  he 
quickly  gave  proof  of  his  masterly  divination  in  a  massive  book 
and  in  various  articles  on  America.  The  most  cursory  analysis 
disclosed  his  process.  He  took  mere  strands  of  plausible  weight 
and  upon  them  wove  a  huge  cobweb  of  assumptions.  America 
lacked  "spirituality";  its  institutionalism  looked  upon  man  "in 
the  light  of  an  animal";  material  prepossessions  dominated  its 
philosophy  and  psychology.  One  of  his  magazine  articles  was 
benignly  entitled  "The  Animal  Ideal  in  America."  At  this  time, 
when  European  labor  organizations  were  looking  emulously  to 
the  American  standard  of  living  and  cultural  opportunities, 
and  were  passionately  demanding  an  improvement  of  their  own 


REVAMPING  THE  OLD  THEME  341 

scale,  what  did  Key ser ling  see?  "Almost  all  the  typical  mani- 
festations of  present  day  American  life  are  not  only  the  ex- 
pressions of  a  higher  standard  of  living — they  really  start  from 
the  assumption  that  man  is  nothing  else  than  an  animal  and 
must  be  dealt  with  accordingly."  (The  italics  are  his.)  3 

Keyserling,  of  course,  was  simply  carrying  on  his  part  of 
an  old-established  business.  Out  from  his  stock-in-trade  came 
the  sneer  at  "the  American  habit  of  appraising  everything  in 
terms  of  the  dollar."  There  is  a  fair  probability  that  not  one  of 
his  hearers  knew  he  was  repeating,  paraphrasing  or  modernizing 
old  criticisms  applied  by  his  predecessors  to  other  times.  Yet 
he  evidently  did  know  that  Americans  were  accustomed  to  the 
kind  of  "truth"  he  had  to  deliver,  and  were  willing  to  pay  for 
the  habit.  But  when  he  went  to  South  America  and  lectured 
there,  he  nicely  adjusted  his  tactics  to  the  place  and  tempera- 
ment. "Count  Keyserling's  observations  on  Argentine  char- 
acter," wrote  a  Buenos  Aires  correspondent,  "are  more  flattering 
than  the  things  he  told  North  American  audiences.  More- 
over, at  every  lecture  he  flays  the  American  character  in  a  way 
that  confirms  the  Argentinian's  own  estimate  of  himself  that 
he  is  infinitely  more  civilized  and  more  cultured  than  the  crude 
North  American  he  despises."  The  special  cable  dispatch  from 
which  this  extract  is  taken  was  a  long  account  quoting  from 
Keyserling's  lectures.  He  discerned  that  Argentinians  were  "the 
most  exaggeratedly  touchy  people  on  earth,"  and  he  tenderly 
ministered  to  their  susceptibilities;  they  were  "interested  only 
in  that  I  say  nothing  that  will  offend  them."  Among  the  clumps 
of  information  he  conveyed  was  his  statement  "that  the  social 
system  of  the  United  States  is  more  nearly  Russian  than  any- 
thing else."  4 

While  the  clairvoyant  Keyserling  was  whitewashing  Latin 
America  at  the  Yankees'  expense,  what  actually  was  to  be  seen 
there?  Not  only  the  touchy  Argentinians  but  the  governing 
classes  in  all  Latin-American  countries  were  deeply  perturbed 
later  by  rude  disclosures  before  the  United  States  Senate  Com- 
mittee investigating  sales  of  munitions.  One  of  the  issues  which 
brought  about  the  revolutionary  uprising  in  Brazil  in  1930  was 
the  glaring  prevalence  of  graft  on  the  part  of  the  regime  in 
power.  But  the  charges  then  made,  serious  as  they  were,  fur- 


342  AMERICA  STRIKES  BACK 

nished  but  a  slight  insight  into  the  general  and  fixed  corrupt 
combination  of  politics  and  business  throughout  South  and 
Central  America  and  in  Mexico.  In  America  bribery  was  plain 
bribery  but  in  Latin  America  it  became  a  euphemism;  Latin- 
American  officials  merely  received  "commissions"  for  influence 
in  the  awarding  of  contracts.  American  business  men  described 
the  process  as  "greasing." 

This  operation  was  repeatedly  referred  to  or  detailed  by 
heads  or  officials  of  American  munition  concerns  in  testimony 
before  the  Senate  Committee.  His  company,  Lammot  du  Pont 
admitted,  had  been  told  on  a  number  of  occasions  that  it  was 
the  general  practice  in  certain  foreign  countries  to  give  so-called 
"commissions"  to  government  officials  or  their  relatives,  al- 
though he  never  "to  his  knowledge"  included  such  cost  items  in 
price  quotations.5  Much  testimony  on  "greasing"  and  dealing 
with  officials  in  Argentina,  Brazil,  Bolivia,  Peru  and  other 
South  American  as  well  as  Central  American  countries  and 
Mexico  was  brought  out  by  the  persistent  questioning.6  "The 
real  foundation  of  all  South  American  business  is  graft."  Thus 
Lawrence  Y.  Spear,  vice-president  of  the  Electric  Boat  Com- 
pany, had  written  to  Sir  Charles  Craven,  managing  director  of 
Vickers,  advising  Craven  that  "at  the  last  minute  something 
extra  is  always  needed  to  grease  the  ways."  Craven,  in  London, 
angrily  denied  having  any  knowledge  of  Spear's  letter. 

One  official  in  Buenos  Aires,  it  was  indicated,  had  received 
$50,000  for  influence  in  the  granting  of  a  submarine  contract, 
and  a  group  of  high  Brazilian  naval  officials  had  demanded 
$180,000  "commissions,"  should  certain  contracts  be  signed. 
To  one  individual  in  Peru  $253,000  in  "commissions"  had  been 
paid  in  eleven  years.  Senator  Bone  asked:  "Mr.  Spear,  can  you 
inform  us  whether  or  not  French  and  Italian  and  English  muni- 
tion concerns  and  submarine  builders  and  shipbuilders  paid 
commissions  on  business  acquired  in  South  America?"  "I  think 
they  all  did,"  replied  Spear.  Senator  Bone  queried  further: 
"They  all  pursued  the  same  course  in  getting  business?"  "Yes," 
the  witness  answered.  "You  will  find  it  impossible  to  do  busi- 
ness in  those  countries  without  enlisting  the  local  people."  7 
Indignant  remonstrance  from  Latin-American  countries  when 
news  of  the  hearings  was  cabled  there  did  not  alter  the  fact 


REVAMPING  THE  OLD  THEME  343 

that  it  was  sworn  testimony,  much  of  it  specific  and  cumulative. 
But  what,  meanwhile,  of  Keyserling?  When,  after  visiting 
South  America,  he  lectured  in  Paris  more  than  a  year  later,  his 
pronouncement  was  of  entirely  different  import  than  the  dictum 
he  had  applied  to  the  United  States.  He  had  declared  of  this 
country  that  "no  real  culture  will  ever  develop  if  America 
continues  to  pursue  her  course  along  the  lines  of  efficiency." 
Yet  in  Paris  on  March  13,  1931,  he  advised  European  nations 
that  they  must  accept  American  mechanization,  and  must 
steadily  develop  it  to  a  certain  extent.  As  usual,  he  subjoined 
a  series  of  precepts  which,  as  propounded  by  him,  were  the 
cloudiest  formulas:  "Intelligence  should  be  restored  as  a  serv- 
ant of  man's  spiritual  nature  by  a  real  understanding  of  the 
significance  of  life";  and  more  of  the  like. 

During  these  years  the  rush  of  British  literati  to  America 
went  on  as  of  old.  Parrotwise,  one  English  writer  after  another 
dwelt  upon  this  or  that  horrendous  aspect  of  American  stand- 
ardization. American  small-town  women  were  made  automata 
by  mechanical  household  appliances,  a  servitude  proved  by 
their  "mastering  the  intricacies  of  electrical  washers  and  dryers 
and  cookers  and  cleaners."  This  was  the  wail  (published  in 
America)  of  Mrs.  Rosita  Forbes  who,  after  earning  a  reputation 
as  an  explorer  of  Africa,  had  now  turned  "explorer"  of  Amer- 
ica. All  the  while  in  her  own  Britain,  had  she  cared  to  go 
exploring  there,  Mrs.  Forbes  could  have  found  that  millions 
of  European  housewives  and  servants  were  still  in  bondage  to 
antiquated,  cumbrous,  exhausting  hand  utensils.  Yet  in  this 
condition,  subsisting  for  ages, — a  standardization  that  imposed 
the  most  onerous  burdens, — the  critic  of  American  moderniza- 
tion could  see  no  evil.  The  reluctance  of  England  to  change  old 
ways  was  shown  again;  only  recently  had  that  country  ar- 
rived at  the  stage  of  abolishing,  by  the  Law  of  Property  act, 
the  last  vestiges  of  feudal  tenure  under  which  archaic  house- 
hold and  other  customs  survived  down  to  the  first  quarter  of 
the  twentieth  century. 

In  this  connection,  it  is  interesting  to  note  that  the  backward 
condition  of  British  hotels  in  many  districts,  and  the  consequent 
deterring  of  tourist  travel,  was  one  of  the  points  raised  by 


344  AMERICA  STRIKES  BACK 

J.  T.  Walton  Newbold,  a  member  of  a  Parliamentary  Com- 
mittee reporting  in  1931  on  means  to  improve  finance  and  in- 
dustry. "The  Tourist  Industry/'  he  wrote,  "has  great  poten- 
tialities, having  regard  to  the  romantic  as  well  as  the  more 
nearly  sentimental  appeal  of  Great  Britain  and  Ireland  to  the 
more  prosperous  as  well  as  the  more  cultured  of  the  emigrant 
nations.  But  until  much  has  been  done  to  modernize  hotel 
accommodations,  to  improve  the  transport  in  the  more  pic- 
turesque parts  and  generally  to  cater  to  people  who  are  accus- 
tomed to  superior  plumbing  and  a  more  rational  system  of 
interior  lighting  and  heating — just  to  mention  a  few  deficiencies 
— a  revenue  running  into  tens  of  millions  sterling  will  continue 
to  be  lost  to  this  country."  8 

Be  that  as  it  may,  the  exploring  Mrs.  Forbes  had  at  least 
seen  something  of  America.  But  now  C.  E.  M.  Joad  spun  forth 
a  book  in  which  he  freely  admitted  that  he  had  never  put  foot 
on  American  soil.  Joad's  production  was  entitled  "The  Babbit 
Warren,"  and  in  the  prefatory  Note  to  this  volume  he  an- 
nounced: "The  author  has  not  had  the  privilege  of  visiting  the 
United  States,  and  has  no  means,  therefore,  of  judging  the  ac- 
curacy of  these  reports.  His  acquaintance  with  Americans  and 
those  who  have  been  to  America  forces  him,  however,  to  the 
conclusion  that  the  stories  given  in  the  text,  even  if  they  are 
not  in  all  respects  literally  true,  possess  at  least  the  inventions 
of  that  distinguished  author,  Mr.  Benjamin  Trovato,  that  is 
to  say,  if  they  are  not  true  they  ought  to  be." 

Joad's  sources  of  information  about  America  were  almost 
entirely  English,  chosen  to  enable  him  to  present  America's 
civilization  as  coarse  and  otherwise  repellent.  By  his  definition, 
a  real  civilization  was  a  way  of  life  that  promoted  truth,  beauty, 
goodness  and  happiness.  While  he  was  thus  abstracted  in  draw- 
ing the  material  for  social  criticisms  out  of  thin  air,  a  quarter 
of  a  million  of  British  miners,  together  with  three  times  that 
many  women  and  children  dependents,  were  progressively 
being  reduced  to  destitution  at  his  very  elbow. 

Not  until  1929,  after  five  years  of  this  harrowing  condition, 
did  various  British  editors  show  any  realization  of  it.  They 
were  galvanized  into  recognition  only  when  the  Prince  of  Wales, 
in  a  broadcast  appeal  for  funds,  drew  attention  to  the  huge 


REVAMPING  THE  OLD  THEME  345 

tragedy.  When  Royal  Highness  spoke,  these  editors  barkened. 
The  miners  had  exhausted  savings,  sold  furniture  and  other 
effects,  and  now  with  all  resources  gone  were  "at  last  in  helpless 
distress,  staring  starvation  face  to  face — nothing — and  few 
places  to  go  for  help."  In  tattered  clothes  gaunt  men,  women 
and  children  shivered  in  the  raw  cold;  rows  of  houses  in  the 
mining  villages  showed  windows  plugged  with  rags;  utter 
desolation  reigned. 

It  was  at  this  time,  also,  that  a  firm  of  London  publishers 
with  much  commendatory  splash  brought  out  "The  American 
Illusion,"  a  book  detailing  a  multitude  of  things  which  its 
author,  Collinson  Owen,  found  grievously  wrong  in  America. 
In  a  foreword,  this  critic  sought  to  convince  readers  that,  until 
his  volume  appeared,  English  writers  had  ignored  "the  darker 
side  of  American  civilization."  Pluming  himself  as  a  fearless 
truth-teller,  Owen  proclaimed:  "Things  have  been  made  too 
smooth  for  America.  A  little  roughage,  as  the  dietetic  experts 
call  it,  should  be  all  to  the  good  for  her  moral  and  spiritual 
digestion."  He  felt  supremely  equipped  to  administer  the  dose; 
had  he  not  spent  two  or  three  months  as  a  member  of  a  British 
journalistic  party  roaming  in  America?  He  had  discovered  in 
America  "an  astonishing  background";  in  this  "crime,  corrup- 
tion and  politics  are  mixed  in  a  fantastic  manner  which  ap- 
parently the  simple  English  mind  is  unable  to  understand." 

When  we  turn  to  actualities  in  Britain,  we  see  that  no  trace 
of  that  fine  simplicity  was  to  be  found,  either  as  a  quality  of 
mind  or  of  its  politics.  There  everyone  who  followed  affairs 
knew  well  the  means  and  indirection  by  which  political  parties 
obtained  their  large  finances.  American  politics  could  present 
nothing  comparable  to  this  clandestine  deviousness.  Yet  be- 
cause funds  got  by  the  disposal  of  titles  were  for  party  use  and 
not  (so  far  as  was  known)  for  personal  benefit,  the  complacent 
attitude  was  taken  that  no  taint  of  gross  corruption  could  pos- 
sibly adhere  to  them. 

If  title  granting  had  not  been  done  on  too  large  a  scale, 
perhaps  members  of  the  House  of  Lords  would  have  remained 
quiescent  under  a  practice  that  had  the  sanction  of  long  use. 
But  the  peers  were  restive.  From  a  membership  of  126  at  a 


346  AMERICA  STRIKES  BACK 

period  not  too  remote,  the  roster  of  the  House  of  Lords  had 
swollen  to  more  than  700,  and,  although  only  a  small  proportion 
could  boast  of  noble  lineage,  nearly  all  were  united  in  senti- 
ments of  opposition  to  further  accessions.  As  a  body,  the  Lords 
were  vested  with  sacred  privileges.  Within  the  exalted  confines 
they  were  superior  to  common  procedure.  No  member  ever  had 
to  face  the  indignity  of  being  called  to  order,  no  matter  how 
disturbing  the  interruption;  any  number  of  members  could,  if 
they  so  wished,  speak  at  one  and  the  same  time,  and  they  often 
did  so.  Their  Lordships  never  lowered  themselves  by  voting 
"Aye"  or  "No";  their  distinguishing  mode  was  to  say  "Con- 
tent" or  "Not  Content";  and  when  they  gave  what  was  re- 
corded as  "applause,"  it  was  a  queer  grunt-like  sound.  "An 
interesting  and  picturesque  relic,"  fit  for  relegation  to  the 
British  Museum.  So  a  Labor  Member  of  the  House  of  Com- 
mons characterized  the  House  of  Lords,  and  he  was  severely 
rebuked  by  the  Speaker  for  his  irreverence. 

Moreover,  there  was  agitation  to  abolish  a  body  so  anachro- 
nistic. Among  other  assailants  William  T.  Stead,  a  noted  London 
editor  who  at  times  employed  sensational  methods  to  arouse 
public  opinion,  had  come  out  with  his  statement  "Why  the 
Lords  Must  Go."  "The  majority  of  men  who  are  made  peers," 
he  had  written,  "are  men  who  have  made  money  and  can  afford 
to  buy  their  coronets  directly  or  indirectly."  How  much  was  the 
cost,  he  stated,  could  not  be  learned.  "But  it  is  perfectly  well 
known  that  peerages  are  never  bestowed  upon  poor  men. 
[There  was  occasionally  an  exception.]  A  title  is  the  fancy 
trimming  of  a  plutocrat.  A  big  brewer  has  not  achieved  the 
climax  of  his  social  ambition  until  he  has  scrambled  over  his 
beer  barrels  into  the  Gilded  Chamber."  Similarly,  Stead  wrote, 
most  of  the  other  peers  were  either  active  plutocrats  or  rich 
men  who  had  harnessed  themselves  to  partisan  timeserving. 
This  list  was  varied  by  the  "thin  stream  of  lawyers  that  trickles 
into  the  House"  [of  Lords] . 

To  make  his  "black  list"  appear  doubly  black,  Stead 
stretched  his  indictment  to  the  point  of  declaring  that  some 
recruits  to  the  House  of  Lords  were  men  who,  if  just  deserts  had 
been  meted  out  to  them,  would  have  been  in  prison.  He  ex- 
cepted  possibly  some  other  of  these  new  hereditary  legislators 


REVAMPING  THE  OLD  THEME  347 

as  having  an  immediate  virtuous  ancestry.  "But,"  he  forcefully 
went  on,  "the  progenitors  of  so  many  others  were  scamps  and 
scoundrels  that  it  is  impossible  to  say,  without  looking  up 
Debrett,  whether  a  man  is  a  hereditary  legislator  because  his 
father  was  pre-eminent  for  rascality  or  for  public  spirit.  Prob- 
ably, as  a  rule,  he  belonged  to  the  majority — he  was  pre- 
eminent for  nothing,  but  belonged  to  the  great  army  of  wealthy, 
respectable  mediocrities  who  have  rendered  yeomen's  service 
to  their  party,  and  who  received  the  partisan's  reward."  And 
Stead  hammered  away  at  the  viciousness  of  a  system  which  not 
only  gave  such  men  legislative  power  for  life  but  also  trans- 
mitted it  to  "their  sons  and  their  sons'  sons  after  them  till  the 
crack  of  doom."  9  The  extraordinary  outspokenness  of  Stead's 
language  reflected  the  intensity  of  feeling  against  the  institution 
of  the  House  of  Lords — an  intensity  by  no  means  confined  to 
him,  and  one  which  impressed  peers  as  a  formidable  threat. 

With  poised  nicety  of  phrase,  Lord  Selbourne,  in  1914,  had 
sought  to  have  the  House  of  Lords  apprise  the  Government 
that  they  disapproved  the  exchange  of  titles  for  money  given 
to  political  parties.  In  the  House  of  Lords'  opinion,  his  motion 
declared,  a  contribution  to  party  funds  should  not  be  a  con- 
sideration influencing  a  Prime  Minister  to  recommend  anyone 
for  honors.  Three  years  later  the  issue  stirred  more  commotion 
in  the  House  of  Lords.  Earl  Loreburn  complained  of  the  hidden 
circumstances  surrounding  the  giving  of  honors  (titles) ;  in  the 
transactions  "the  actual  parties  have  a  profound  interest  in 
keeping  the  matter  secret."  In  the  august  House  of  Lords  that 
was  a  day  of  revelations — not  of  generalizations  but  of  specifi- 
cations— although  no  names  were  mentioned.  The  word  of  the 
Lords  was  taken  implicitly.  Loreburn  instanced  one  of  his 
friends  who  three  times  was  accosted  with  proposals  to  pay 
£25,000  for  a  baronetcy  or  £15,000  for  a  knighthood.  Selbourne 
divulged  similar  cases.  Particularizing  a  case  of  which  he  like- 
wise had  positive  personal  knowledge,  the  Earl  of  Dartmouth 
detailed:  "He  was  very  wealthy,  and  he  was  generous — which 
all  wealthy  people  are  not.  He  sat  in  the  House  of  Commons  for 
some  time.  He  was  one  of  those  ideal  Members  who  rarely,  if 
ever,  spoke,  and  who  was  always  there  when  wanted.  .  .  .10 
When  it  became  known  that  he  was  not  going  to  run  for  Parlia- 


348  AMERICA  STRIKES  BACK 

ment  again,  a  peerage  was  offered  him,  and  he  accepted  it.  ... 
Soon  afterward,  the  'go-between'  or  the  'tout'  or  whatever  you 
like  to  call  him,  came  to  my  friend  and  said,  'How  about  that 
£30,000?'  [No  Tammany  Hall  demand  was  ever  more  brusque 
and  business-like.]  My  friend  was  very  indignant.  He  said  he 
had  heard  nothing  of  the  kind,  but  he  was  informed  that  it  was 
quite  customary.  My  friend  then  replied:  'I  do  not  know 
whether  it  is  customary  or  not.  You  will  get  no  £30,000  out  of 
me.'  "  And  they  did  not.  But,  it  turned  out,  the  powers  above 
concluded  that  his  long  partisan  subservience  deserved  reward, 
if  only  to  encourage  others  in  the  same  course,  and  he  was 
granted  the  peerage. 

The  open  support  by  two  London  newspapers  of  the  confer- 
ring of  titles  was  wryly  described  by  Lord  Stuart  of  Wortley. 
Of  the  large  roll  of  bankers,  ship-owners,  brewers,  railway  mag- 
nates, manufacturers,  newspaper  owners  and  other  amassers 
of  wealth  who  had  been  burnished  with  peerage  trappings  not 
many  were  present  to  hear  Lord  Stuart  and  the  other  com- 
plainants. The  newspapers  in  question,  said  Stuart,  justified  the 
practice  of  title  distribution  as  necessary  to  get  the  big  balances 
needed  by  the  political  parties.  Stuart  reviewed  the  arguments 
of  one  of  these  newspapers,  "The  Westminster  Gazette."  Yes,  it 
agreed,  titled  honors  did  create  and  intensify  class  division, 
they  did  encourage  snobbism,  and  they  did  stamp  and  perpetu- 
ate inequality;  yet  without  the  funds  derived  from  such  a 
source  political  parties  could  not  finance  themselves,  nor  could 
staunch  partisan  services  be  requited. 

During  these  proceedings  in  the  House  of  Lords  we  behold 
none  other  than  Lord  Bryce — the  same  James  Bryce  who  saw 
so  much  corruption  in  America — informing  his  fellow  peers  of 
an  additional  fact.  Bryce  said  that  he  did  not  know  whether 
money  passed  when  Privy  Councillorships  were  awarded. 
"But,"  he  significantly  commented,  "of  recent  years  the  honor 
of  Privy  Councillor,  with  the  title  which  it  carries,  has  been 
sown  broadcast  in  the  House  of  Commons."  Submitting  the 
Government's  case,  Earl  Curzon  (Lord  President  of  the  Coun- 
cil) felt  obliged  to  admit  "the  almost  complete  unanimity 
of  opinion"  in  the  House  of  Lords  in  opposition  to  barter  of 
titles.11 


REVAMPING  THE  OLD  THEME  349 

Within  a  few  years  there  had  been  created  eighty-seven  peer- 
ages, numerous  baronetcies  and  knighthoods,  and  a  host  of 
lesser  dignities.  The  mortals  so  elevated  did  not  have  to  seek; 
they  were  sought.  For  the  methods  used  we  have  the  authority 
of  Sir  Charles  Mallet.  An  assiduous  search  was  made  for  men 
able  to  pay  richly  for  titles;  possession  of  wealth  was  the  prime 
qualification.  As  a  formality  it  was  easy  to  credit  these  persons 
with  some  kind  or  show  of  public  service  as  a  nominal  reason 
for  conferment  of  the  honor.  "Names,"  Mallet  related,  "were 
collected  of  men  known  to  have  made  fortunes  in  war  time;  in 
most  busy  industrial  centers  there  were  such  men  to  be  found. 
Relations  were  gradually  established  with  them  through  friends 
or  acquaintances  or  local  lawyers,  or  by  visits  from  the  travelers 
[agents]  of  the  Ministerial  firm."  If — and  there  has  been  no 
refutation  of  Mallet's  statements — this  were  the  process,  it 
showed  a  combination  of  business  system  and  diplomatic  adroit- 
ness operating  as  furtively  as  it  did  effectively.  The  schedule  of 
prices  was  flexible,  varyingly  adjusted  to  individual  cases.  Ac- 
cording to  Mallet,  from  £5,000  to  double  or  more  was  asked 
for  a  knighthood;  for  baronetcies  from  £20,000  to  £40,000; 
peerages  fetched  more.  From  somewhere,  it  was  certain,  came 
a  massive  political  fund  proving,  if  nothing  else,  what  a  canny 
art  British  politicians  made  of  collecting  and  storing  a  great 
campaign  treasury.  Before  the  Coalition  Ministry  (formed  to 
pilot  Britain  through  the  World  War)  had  dispersed,  £1,500,- 
000  had  been  compactly  gathered  and  thriftily  safeguarded. 
For,  it  was  further  revealed,  this  amount  by  fortunate  invest- 
ment increased  to  nearly  £3,000,000  of  which  Premier  Lloyd 
George,  Liberal  Party  leader,  had  full  control  for  some  time.12 
On  viewing  such  an  accomplishment,  there  was  not  an  Ameri- 
can political  boss  who  would  not  have  confessed  himself  a 
novice  and  who  would  not  have  contemplated  the  feat  with 
wonder  strongly  tinctured  with  envy. 

Such  a  political  party  campaign  fund,  whether  $7,210,000 
or  $14,550,000,  was  unmistakably  mighty  for  a  country  of 
Britain's  small  area.  Even  though  it  was  not  disbursed  in  any 
single  campaign  and  formed  a  fund  to  be  drawn  upon,  its  size 
nevertheless  rivaled  many  of  the  campaign  funds  used  for  the 
whole  extent  of  America  in  Presidential  elections.  Yet  American 


350  AMERICA  STRIKES  BACK 

politics  was  constantly  condemned  in  England  for  its  lavish  and 
corrupt  use  of  money.  American  politics  had  never  reached  the 
stage  of  having  on  deposit  or  in  investment  a  large  permanent 
fund;  the  money  needed  was  raised  in  each  campaign.  During 
a  series  of  Presidential  campaigns  from  1896  to  1916  onward, 
the  ascertainable  amounts  spent  in  each  election  by  the  Re- 
publican and  Democratic  parties  together  varied  from  four  to 
six  or  seven  million  dollars,  the  amount  depending  upon  the 
closeness  of  the  contest.  To  these  sums  could  be  added  a  part 
of  those  spent  by  local  organizations  for  their  own  success  but 
contributing  to  that  of  one  or  the  other  party  nationally. 

The  preliminary  to  Presidential  campaigns  was,  of  course, 
the  competition  of  candidates  for  the  nomination  by  the  old 
parties.  In  1920  fifteen  aspirants  spent  a  total  of  $2,980,033; 
of  this  amount  General  Leonard  Wood  expended  the  bulk — 
$1,773,303 — the  publicity  as  to  which  was  effective  in  defeat- 
ing his  aim  to  bag  the  Republican  nomination.  The  sum  spent 
in  the  Presidential  campaign  itself  was  much  greater  than  in 
any  previous  campaign.  Expenditures  by  national  and  State 
organizations  of  the  Republican  and  Democratic  parties  to- 
gether totaled  a  computed  $10,338,509,  which  did  not  include 
auxiliary  sums  supplied  by  local  organizations.13  The  expendi- 
tures of  all  candidates  for  Presidential  nominations  in  1928 
were  $894,000;  the  total  net  receipts  of  the  Republican  and 
Democratic  parties  together  during  the  campaign  were  $17,- 
282,000,  and  the  expenditures  $16,586,000.  A  long  list  of 
capitalists  and  other  rich  men  contributed  funds  to  both 
parties.  Seeking  out  and  disclosing  every  gatherable  fact,  and 
listing  names  and  amounts,  the  United  States  Senate  Special 
Committee  Investigating  Presidential  Campaign  Expenses  un- 
earthed no  evidence  of  corruption.  "The  Committee,"  it  re- 
ported, "finds  almost  uniformly  that  all  those  persons  engaged 
in  handling  campaign  funds  strictly  complied  with  the  Corrupt 
Practices  acts  of  the  several  States,  and  abstained  from  any 
ascertainable  impropriety."  14 

It  was  in  some  Senatorial  primaries  and  elections  that  cor- 
ruption was  found.  Very  different  were  the  ways  of  the  Ameri- 
can Congress  from  those  in  the  British  Parliament.  In  Congress 
no  member  could  charge  corruption  without  being  pressed  for 


REVAMPING  THE  OLD  THEME  351 

names  or  other  details.  He  was  expected  to  give  them,  and  if 
he  did  not,  methods  were  put  into  effect  to  compel  him.  Cor- 
ruption charges  by  non-members  or  by  newspapers  immedi- 
ately, as  a  rule,  led  to  the  appointment  of  an  investigating 
committee.  There  was  no  slighting  of  any  charge,  and  seldom 
was  there  whitewashing. 

Following  two  of  its  investigations  which  proved  that  there 
had  been  improper  use  of  money  in  electing  William  Lorimer  a 
Senator  from  Illinois,  the  United  States  Senate,  in  1912,  by  a 
vote  of  55  to  28,  declared  his  seat  vacant.  Another  exclusion 
was  that  of  William  S.  Vare,  Republican  boss  of  Philadelphia, 
who  had  claimed  election  in  a  three-cornered  Republican  candi- 
dacy in  a  Pennsylvania  contest  in  which  the  rival  candidates 
had  spent  a  total  of  $2,777,942.  A  Senate  Investigating  Com- 
mittee found  " numerous  and  various  instances  of  fraud"  in 
behalf  of  Vare's  candidacy.  For  his  election  $785,000  had  been 
expended  in  the  primaries;  one  of  his  unsuccessful  competitors, 
however,  had  spent  $  1,804,9 79. 15  A  third  case  of  exclusion  was 
that  of  Frank  L.  Smith,  presenting  his  credentials  as  an  elected 
Senator  from  Illinois.  His  contributions  and  expenditures  in 
the  primary  election  were  estimated  at  a  provisional  total  of 
$458, 782.16  By  the  overwhelming  vote  of  61  to  23,  in  1928,  the 
United  States  Senate,  acting  upon  the  committee's  report  that 
his  methods  were  tainted  "with  fraud  and  corruption,"  refused 
to  admit  him.  And  there  were  other  cases.  No  longer  was  the 
United  States  Senate  dominated,  as  it  once  had  been,  by  multi- 
millionaires and  corporation  lawyers;  of  the  branches  of  Con- 
gress it  had  become  the  militant  and  radical  body. 

In  contrast,  the  Parliamentary  method  in  England  of  dealing 
with  campaign  funds  and  expenditures  required  a  punctilious 
abstention  from  damaging  inquiry.  The  sale  of  titles  was  again 
discussed  in  the  House  of  Lords  in  1922.  "We  are  too  fond," 
said  Lord  Carson,  "of  carrying  on  public  life  in  the  atmosphere 
of  sham.  We  are  down  today,  for  the  first  time,  on  this  question 
with  a  stern  reality.  ...  I  have  had  more  than  once  in  my 
chambers  to  advise  on  cases  in  which  I  have  examined  long  corre- 
spondence which  showed  that  there  was  a  regular  brokerage, 
however  conducted,  for  the  purpose  of  carrying  out  and  obtain- 
ing honors.  What  was  the  connection  between  broker  and  the 


352  AMERICA  STRIKES  BACK 

Government  I,  of  course,  do  not  know.  That  is  the  one  thing 
we  are  all  clever  enough  to  know  will  never  be  known  and  will 
always  be  kept  in  the  background."  17  No  serious  attempt  was 
made,  he  should  have  added,  to  find  out.  As  member  after 
member  of  the  House  of  Lords  told  of  negotiations  carried  on 
with  friends,  not  a  single  question  was  asked  regarding  names. 
There  was  no  curiosity  to  learn  of  definite  clues  which,  if  pur- 
sued, would  somewhat  have  opened  up  the  way  to  explore  the 
sources  and  depths  of  the  business. 

This  session  was  marked  by  a  steaming  time  over  the  Govern- 
ment's recommendation  of  a  peerage  for  Sir  Joseph  B.  Robinson. 
He  had  heaped  together  a  fortune  from  gold  and  diamond  min- 
ing in  South  Africa,  and  had  been  created  a  baronet  in  1908. 
Among  other  South  African  corporation  posts,  he  had  been 
chairman  of  a  mining  concern,  the  Randfontein  Estates  Com- 
pany. Citing  the  records  of  the  Appellate  Division  of  the  Su- 
preme Court  of  South  Africa,  Lord  Harris  described  one  of 
Robinson's  deals.  The  company's  other  directors  were  Robin- 
son's tools,  and  in  1906  they  approved  his  move  to  acquire 
certain  valuable  mining  rights  for  the  company.  He  then  used 
a  dummy  company,  which  he  entirely  controlled,  to  buy  the 
rights,  subsequently  reselling  them  to  the  Randfontein  Estates 
Company  and  pocketing  a  personal  profit  of  £210,000.  Nine 
years  later,  when  S.  B.  Joel  bought  Robinson's  interests  in  the 
Randfontein  corporation,  the  facts  were  discovered  and  suit 
was  brought.  The  court  denounced  the  dummy  company  as  "a 
device  to  camouflage  the  transaction,"  and  in  a  scathing  de- 
cision condemned  Robinson  to  pay  a  sum,  including  costs,  of 
more  than  £500,000.  Robinson  petitioned  the  Judicial  Com- 
mittee of  the  Privy  Council  for  permission  to  appeal;  his  plea 
was  considered  and  dismissed  in  November,  192 1.18 

These  activities  of  Robinson  were  familiar  enough  to  the 
Government — the  court  findings  had  been  published  in  the 
newspapers — yet  one  of  the  chief  grounds  on  which  he  had 
been  formally  listed  for  a  peerage  was  for  "National  and  Im- 
perial services."  Referring  to  his  own  eight  years'  intimate 
association  with  South  Africa,  Earl  Buxton  said  that  he  had 
never  heard  Robinson's  name  connected  with  any  public 
service;  Robinson  had  been  nothing  more  than  a  mining  mag- 


REVAMPING  THE  OLD  THEME  353 

nate.  The  Earl  of  Selbourne,  who  had  been  Governor  in  South 
Africa,  declared  that  when  he  went  there  Robinson  was  known 
everywhere  as  a  pro-Boer.  Selbourne  also  read  extracts  from 
the  court's  judgment,  and  went  on:  "Hitherto  there  has  been 
no  personal  corruption  in  connection  with  the  honors — when 
money  has  been  taken  it  has  been  taken  for  the  benefit  of  a 
political  party,  be  it  Conservative  or  Liberal  or  Coalition — but 
I  do  not  believe  that  these  immense  sums  can  continue  to  pass 
in  complete  secrecy,  with  no  publicity,  no  responsibility,  and 
personal  corruption  not  ensue.  .  .  .  Peerages  are  conferred 
upon  individuals  about  whom  nothing  is  known  except  their 
exceeding  wealth.  .  .  .  Surely  this  amounts  to  something  like 
a  farce.  If  the  public,  if  the  Press  and  Parliament,  sit  down 
under  this  without  any  further  protest  or  effort  to  clean  this 
Augean  stable,  is  it  wonderful  that  foreigners  accuse  us  of  being 
hypocritical?"  19 

"Complete  secrecy,  no  publicity,  no  responsibility."  When 
Selbourne  thus  protested,  not  one  of  his  hearers  took  this 
pertinent  occasion  to  point  out  how  American  law  required 
the  fullest  publicity  and  responsibility  as  to  campaign  contribu- 
tions and  expenditures.  The  large  body  of  American  law  was 
the  result  of  the  aim  to  do  away  with  secrecy  and  the  illicit  use 
of  money.  In  America  reports  were  regularly  made  giving 
specific  lists  of  all  contributors  to  campaign  funds  and  the  pur- 
poses for  which  those  funds  were  spent. 

Also  veiling  names,  the  Duke  of  Northumberland  described 
two  letters  he  had  seen  from  persons  purporting  to  be  inter- 
mediaries between  Downing  Street  (the  Cabinet  meeting  place) 
and  rich  men,  friends  of  his,  slated  as  prospects  for  honors. 
These  letters  asked  for  confidential  interviews,  and  North- 
umberland told  of  the  results  of  his  talks  with  both  of  the  men 
approached.  In  one  case  an  intimation  of  £40,000  for  a  baro- 
netcy went  unheeded ;  the  other  man  was  told  he  was  considered 
"eminently  worthy"  of  an  honor,  but  that  he  could  not  expect 
it  unless  he  paid  according  to  the  scale,  which  ran  from  £10,000 
to  £12,000  for  a  knighthood,  and  £35,000  to  £40,000  for  a 
baronetcy.20 

After  the  attacks  upon  himself,  Robinson  made  a  quick  and 
convenient  exit.  He  sent  a  letter  to  the  Prime  Minister  with- 


354  AMERICA  STRIKES  BACK 

drawing  his  name;  he  had  not,  he  wrote,  cared  much  at  his  age 
(he  was  past  sixty)  about  the  projected  honor.  As  a  concession 
to  the  opposition,  Lloyd  George,  still  Prime  Minister,  caused 
the  appointment  of  a  Royal  Commission  to  advise  on  future 
procedure  in  making  recommendations  of  persons  deserving 
special  honor.  This  Commission  was  composed  of  titled  digni- 
taries— the  Duke  of  Devonshire,  Baron  Dunedin,  Baron  Den- 
man  and  various  baronets.  The  only  untitled  member  among 
the  seven  was  Arthur  Henderson,  who  later  became,  from  1929 
to  1931,  Foreign  Secretary  in  the  Labor  Ministry  governing 
Britain.  In  December,  1922,  came  the  Royal  Commission's 
feeble  report  signed  by  all  members  except  Henderson. 

That  its  report  was  an  index  to  British  political  morality — 
or  rather  to  the  lack  of  it — the  Royal  Commission  evinced  no 
realization.  Through  heavy  sentences  the  report  lumbered  on, 
first  falling  back  upon  the  sanction,  based  on  long  usage,  that 
justified  the  conferring  of  honors  for  political  service.  This,  it 
pointed  out,  had  been  continuous  since  the  inception  of  the 
party  system.  In  the  practice  it  could  find  nothing  to  condemn. 
"Nearly  all  witnesses  that  we  have  examined  have  proffered 
the  opinion  that  such  a  system  is  right  and  ought  to  prevail." 
The  report  admitted  the  notorious  existence  of  political  party 
funds,  but  affirmed  their  necessity  in  modern  elections.  "In- 
deed, two  of  the  Party  managers  with  great  frankness  informed 
us  [of  the  funds],  giving  actual  figures  as  to  the  sources  of 
supply"  but  those  managers  "were  emphatic  that  so  far  as  they 
were  concerned"  there  was  no  bargain. 

Like  previous  Royal  Commissions,  this  body  was  most  com- 
plaisant in  accepting  testimony  at  its  face  value  and  in  refrain- 
ing from  deep  inquiry.  However,  it  did  manage  to  see  one  set 
of  villains:  "Nevertheless  there  is  no  doubt  that  there  has  been 
for  some  time,  and  recently  in  increasing  numbers,  persons, 
who,  for  want  of  a  better  name,  we  may  stigmatize  as  touts  who 
have  been  going  about  asserting  that  they  were  in  a  position 
to  secure  honors  in  return  for  specified  payments."  These  touts, 
the  Commission  urged,  should  be  dealt  with  by  the  passage  of 
a  penalizing  act.  And  now  came  the  grand  remedy  evolved  by 
the  Commission.  As  a  supervising  agency  over  honor-giving,  it 
recommended  the  appointment  by  the  Prime  Minister  of  a 


REVAMPING  THE  OLD  THEME  355 

small  committee  to  scrutinize  names  selected  for  titles.  To  each 
name  was  to  be  appended  a  statement  by  the  Patronage  Secre- 
tary or  Party  Organizer,  certifying  that  no  payment  or  ex- 
pectation of  payment  to  any  political  party  or  political  fund 
was  directly  or  indirectly  associated  with  the  recommendation. 

In  Henderson  the  other  members  of  the  Royal  Commission 
encountered  a  severe  critic.  The  Commission,  his  separate  re- 
port set  forth,  might  have  made  a  much  more  searching  in- 
quiry; it  had  the  names  of  "touts"  but  none  of  these  had  been 
summoned  to  give  evidence.  Henderson  continued:  "The  omis- 
sion of  evidence  from  those  who  are  alleged  to  have  asserted 
that  they  were  in  a  position  to  secure  honors  for  money  pay- 
ments, and  from  those  who  have  been  approached  by  such 
persons,  has  left  unexplored  one  of  the  gravest  abuses  concern- 
ing the  nomination  for  honors.  .  .  .  This  system  whereby  the 
financial  assistance  rendered  to  a  party  is  recognized  by  the 
conferment  of  an  honor  by  the  State  is,  in  my  judgment,  de- 
plorable and  discredits  the  honors  system."  21  Henderson  could 
appropriately  have  gone  further.  Why,  he  could  have  asked, 
did  not  the  Commission  make  public  such  important  data  as  the 
"actual  figures"  of  contributions  and  the  sources  of  those 
funds? 

A  bill  to  prevent  abuses  connected  with  grants  of  honors  was 
passed  by  Parliament  in  1923,  and  the  proposed  supervising 
committee  was  instituted.  But  did  its  functioning  make  any 
difference?  With  brief  effectiveness  E.  Thurtle,  M.P.,  on  No- 
vember 10,  1927,  put  these  questions  to  Prime  Minister  Stanley 
Baldwin;  Had  the  Prime  Minister's  attention  been  called  to 
"The  Daily  Mail's"  statement  that  the  old  abuses  in  the  dis- 
pensing of  titles  were  being  continued?  Did  the  Government 
contemplate  taking  any  action  against  that  newspaper?  To 
both  queries  Baldwin  answered  in  the  negative.  Four  days  later, 
Thurtle  denounced  the  title  transactions  as  a  "peculiarly 
nauseating  form  of  political  corruption."  22  Of  the  peerages 
granted  in  that  year,  one  had  gone  to  Sir  Charles  Greenway, 
then  seventy  years  old,  who  had  been  created  Lord  Greenway; 
he  was  styled  in  the  British  press  and  known  in  the  public  mind 
as  the  "oil  king."  At  the  time,  there  were  740  members  of  the 
House  of  Lords. 


356  AMERICA  STRIKES  BACK 

Lloyd  George,  says  Mallet,  had  often  been  questioned  about 
the  political  party  fund  in  his  custody  but  refused  to  give 
information  concerning  its  management,  "although  on  its  origin 
he  could  hardly  be  expected  to  dilate."  But,  in  fairness,  Lloyd 
George's  attitude  was  open  to  a  somewhat  different  interpre- 
tation. Early  in  1927  Lord  Rosebery,  himself  formerly  a 
Liberal  Party  Prime  Minister,  wrote  to  "The  Times,"  of  Lon- 
don, demanding  an  investigation  of  the  origin  of  titles  of  ninety 
peers  and  of  the  source  of  Lloyd  George's  political  fund.  To 
these  proposals  one  of  Lloyd  George's  spokesmen  raised  no 
objections.  "Every  party,"  said  he,  "is  so  deeply  involved  that 
we  should  not  suffer  in  the  least.  The  same  charge  can  be  made 
against  every  [British  party]  Government,  including  Lord 
Rosebery 's."  Questioned  as  to  whether  this  retort  was  an  ad- 
mission of  the  giving  of  honors  in  exchange  for  services  in  cash 
or  in  kind,  he  replied:  "Certainly,  but  every  other  Government 
has  done  the  same."  Which  undeniably  was  so.  And  Lloyd 
George  himself  could  and  did  plumply  remind  Rosebery  how 
he,  Rosebery,  had  financed  his  own  general  election  in  1895. 
Any  real  investigation  would  have  brought  discomfiture  to  both 
parties. 

The  size  of  the  political  fund  wielded  by  Lloyd  George  was 
definitely  shown  in  1927,  when  he  arranged  to  sell  610,000 
shares  in  United  Newspapers,  Limited,  to  the  Daily  Chronicle 
Investment  Corporation,  a  new  company  organized  to  acquire 
a  chain  of  newspapers.  The  purchase  price  was  £2,888,000, 
and,  Mallet  recounts,  Lloyd  George  was  treated  as  the  sole 
seller  of  the  stock;  no  mention  was  made  of  him  as  trustee. 
Critical  of  this  former  Prime  Minister  as  he  was — even  refer- 
ring to  the  fund  as  "loot" — Mallet  nevertheless  fully  acknowl- 
edged Lloyd  George  as  above  any  personal  misuse  of  the 
money.  That  he  would  use  such  a  fund  for  any  other  than  what 
he  deemed  political  objects  nobody  supposed,  so  Mallet  wrote. 
But,  in  Mallet's  appraisal,  Lloyd  George  was  too  prone  to  as- 
sume the  identity  of  these  objects  with  his  political  ambitions. 
Persons  fearing  money  influence  in  politics  and  alive  to  the 
danger  of  political  corruption  felt  deep  concern  in  the  fact  "that 
a  fund  of  two  or  three  million  pounds  should  be  attached  to 
the  fortunes  of  a  single  politician,  used  steadily  to  advance  his 


REVAMPING  THE  OLD  THEME  357 

personal  interests  and  employed  to  bring  into  the  House  of 
Commons  candidates  who  depend  upon  his  support."  After 
negotiations  the  National  Liberal  Federation  obtained  a  sub- 
stantial part  of  the  fund  for  immediate  needs,  and  for  the  time 
Lloyd  George  was  made  the  Liberal  Party's  paymaster.23 


CHAPTER   XXIV 
THE  TRUE  CONTRAST 

THE  sentencing  of  Lord  Kylsant  to  prison  has  frequently  been 
cited  as  evidence  of  the  workings  of  "impartial  British  justice." 
In  America  this  imprisonment  of  a  peer  made  a  stir  out  of  all 
proportion  to  its  significance.  It  provoked  not  a  few  editorials 
in  American  publications,  which  unfavorably  contrasted 
America's  administration  of  justice  with  Great  Britain's,  and 
dilated  upon  the  immunity  enjoyed  by  powerful  law  violators 
in  the  United  States. 

The  reality  in  both  countries  was  much  the  same,  but  with 
the  advantage  on  America's  side.  Of  the  large  number  of  British 
peers,  many  from  time  to  time  had  been  involved  and  often 
openly  associated  with  dubious  financial  schemes.  None  of 
them  was  ever  molested.  It  should,  however,  be  borne  in  mind 
that  the  company  of  which  Kylsant  was  the  head  was  reputable 
and  long-established.  Had  that  not  been  true,  his  story  might 
well  have  had  a  different  and — for  him — a  happier  ending.  In 
America,  on  the  other  hand,  it  was  by  no  means  uncommon  to 
see  multimillionaires  indicted  on  charges  of  conspiracy  in  re- 
straint of  trade,  bribery  and  similar  offences.  Those  indictments 
usually  followed  after  Congressional  or  legislative  investiga- 
tions. As  a  rule  the  multimillionaire  defendants,  surrounded  by 
every  legal  and  financial  resource,  contrived  to  escape  convic- 
tion. Occasionally,  though,  their  prosecution  was  not  without 
some  result. 

One  partial  instance  was  the  outcome  of  a  persistent  investi- 
gation made  by  a  United  States  Senate  Committee  into  the 
leasing  of  naval  oil  lands.  Testimony  showed  that,  in  1921, 
$100,000  had  been  handed  to  Albert  B.  Fall,  Secretary  of  the 
Interior  under  President  Harding,  by  a  son  of  Edward  L. 
Doheny,  multimillionaire  oil  operator.  To  Edward  L.  Doheny 
was  granted  a  lease  of  naval  oil  lands  in  California.  Doheny 

358 


THE  TRUE  CONTRAST  359 

admitted  having  "lent"  Fall  the  $100,000.  Harry  F.  Sinclair, 
another  oil  operator  of  the  same  stamp,  obtained  from  Fall  in 
1922  a  lease  of  similar  areas  in  Wyoming.  Within  a  month 
thereafter,  it  was  disclosed,  Fall  had  received  from  Sinclair  a 
total  of  $269,000  in  Liberty  bonds  and  cash, — an  amount  sub- 
sequently increased  to  total  advances  of  $304,100.  Refusing  to 
answer  a  question  put  by  the  Senate  Committee,  Sinclair  was 
pronounced  in  contempt.  Fall  and  Edward  L.  Doheny  were 
finally  acquitted  on  the  conspiracy  charges,  and,  in  1930,  there 
followed  Doheny's  acquittal  on  the  charge  of  having  bribed 
Fall.  Doheny's  defence  was  that  the  money  handed  to  Fall  was 
an  innocent  and  sentimental  loan.  Meanwhile,  however,  Fall 
was  tried  on  a  charge  of  bribery,  convicted  in  1929,  and  sen- 
tenced to  a  year  in  prison  and  a  fine  of  $100,000.  Hard  but 
unsuccessfully  did  he  fight  to  keep  out  of  prison,  whither  he 
was  taken  in  1931  and  where  he  served  more  than  nine  months. 

In  the  end,  the  force  of  agile  lawyers  at  Sinclair's  command 
could  not  save  him  from  going  to  a  cell — that  jowled  magnate, 
of  whom  it  had  cynically  been  said:  "You  can't  put  a  hundred 
million  dollars  in  jail."  When,  in  1927,  in  the  District  of 
Columbia  Supreme  Court,  Sinclair  was  sentenced  to  three 
months7  imprisonment  and  a  fine,  he  had  sanguinely  exclaimed: 
"I  do  not  expect  to  spend  a  day  in  jail  or  pay  a  dollar  fine."  But 
two  years  later  he  was  stowed  in  jail,  kept  there  six  and  a  half 
months,  part  of  which  sentence  was  for  contempt  of  court  in 
causing  die  jury  to  be  shadowed  in  his  first  trial.  More  than 
one  American  cartoonist,  with  gleeful  captions  such  as  "It  Can 
Be  Done,"  "It's  A  Reality,"  pictured  a  bloated  bag  of  dollars 
sitting  behind  prison  bars.  Both  oil  land  properties  were  re- 
gained by  the  Government  when  the  Supreme  Court  of  the 
United  States  declared  the  leases  void. 

In  Britain,  however,  where  there  could  be  no  deep-searching 
investigations  like  those  in  America,  millionaires  could  consider 
themselves  privileged  characters — though  more  especially,  of 
course,  when  the  aureole  of  nobility  was  conferred  upon  them. 
Even  the  routine  publicity  required  in  America  of  corporation 
holdings  and  accounts  had  no  serious  analogy  in  Britain,  al- 
though the  mistaken  tendency  in  America  was  to  hold  up  British 
laws  as  models.  For  example,  of  a  reviewed  list  of  one  hundred 


360  AMERICA  STRIKES  BACK 

and  eleven  British  investment  trusts,  only  fifty-two  published 
their  holdings  at  the  end  of  1933.  British  corporation  executives 
could  well  congratulate  themselves,  when  they  saw  the  open 
way  in  which  the  Federal  Trade  Commission  exposed  the  huge 
bonuses  and  other  extra  amounts — millions  or  hundreds  of 
thousands  of  dollars — which,  in  addition  to  salaries,  had  been 
paid  to  officers  and  directors  by  many  of  the  nine  hundred 
American  corporations  investigated  at  that  time. 

American  commentators  on  Kylsant's  fate  have  overlooked 
the  fact  that  the  case  of  Joseph  W.  Harriman  was  a  fair  equiva- 
lent. In  all  probability,  if  Harriman  had  been  a  British  banker 
with  a  position  corresponding  to  that  which  he  held  in  the  flush 
of  his  career  in  New  York  City  (at  one  time  his  personal 
fortune  was  $14,000,000),  he  would  have  been  expedited  into 
the  peerage.  In  his  domain  he  assuredly  had  greater  financial 
power  than  had  Kylsant  in  his.  For  long  a  money  overlord  and 
a  shining  light  in  society,  Harriman,  in  1934,  was  convicted  in 
New  York  City  of  misapplication  of  bank  funds  and  falsifica- 
tion of  records.  His  sentence  of  four  and  a  half  years  in  prison 
was  more  than  quadruple  that  given  to  Kylsant. 

For  his  frauds  in  England,  Clarence  Hatry  was  sentenced  in 
1930  to  serve  fourteen  years  in  prison.  But  Hatry  was  an  ordi- 
nary individual,  a  business  adventurer;  and  in  his  case,  joined 
with  the  cases  of  his  associates,  the  vigor  of  prosecution  was 
stimulated  by  the  determination  of  several  big  British  banks 
which  had  been  duped  and  swindled.  A  few  words  about  Hatry. 
Neither  he  nor  his  partners  had  expert  knowledge  of  steel  pro- 
duction. Yet — and  without  questioning  from  anywhere — they 
confidently  attempted  an  imitation  of  American  mergers  by 
undertaking  the  reorganization  of  Britain's  steel  industry.  By 
pledging  steel  stock,  and  in  other  ways,  they  were  able  to  raise 
£4,800,000  of  which  £1,500,000,  so  later  developments  showed, 
was  used  partly  to  pay  off  the  liabilities  of  a  constituent  com- 
pany and  partly  in  a  campaign  of  stock-market  rigging  to  sup- 
port their  shares.  Huge  was  the  surprise  of  the  bankers  con- 
cerned when  the  revelation  came  that  securities  on  which 
£789,000  had  been  obtained  were  fraudulent.  All  of  the  Hatry 
quartet  pleaded  guilty;  the  prison  sentences  of  his  confederates 
ran  respectively  seven,  five  and  three  years. 


THE  TRUE  CONTRAST  361 

As  a  result  of  the  Hatry  operations,  some  English  financial 
institutions  were  in  immediate  need  of  fund  replenishment. 
Quantities  of  American  stocks  were  dumped  on  the  New  York 
Stock  Exchange,  thus  giving  the  initial  push  to  the  decline 
which,  late  in  1929,  became  a  convulsive  stock-market  panic. 
In  the  preceding  "mad-era"  speculative  boom  in  America, 
shoals  of  European  speculators  and  investors  had  been  madly 
bent  upon  money-making  in  that  boiling  stock-market  ascen- 
sion. From  London  alone  flashed  daily  orders  for  the  purchase 
of  scores  of  thousands  of  American  shares;  and  likewise,  in 
varying  degrees,  came  the  rush  of  buying  messages  from  Berlin, 
Brussels  and  Amsterdam.  "Nearly  all  of  the  surplus  wealth  on 
this  side  of  the  Atlantic/'  complained  Lord  Rothermere  in  "The 
Sunday  Pictorial"  of  London,  in  the  summer  of  1929,  "is  being 
changed  immediately  into  American  stock  certificates." 

Why,  before  complying  with  Hatry's  loan  application,  did 
not  those  British  bankers  acquaint  themselves  fully  with  the 
condition  of  his  group's  companies?  After  the  Hatry  collapse, 
Sir  Gilbert  Garnsey,  appointed  to  examine  the  wreck,  had  no 
difficulty  in  ascertaining  this  cardinal  fact:  From  the  start  of 
the  Hatry  venture  the  central  corporation  in  it,  the  hub  of  the 
merger  itself,  had  been  insolvent!  Always  shielded  from  cur- 
sory, not  to  say  penetrating,  Parliamentary  investigation, 
powerful  British  bankers  remained  sheltered,  their  arcana 
sealed.  Thus  came  about  the  widespread  belief,  especially 
active  in  America,  that,  both  individually  and  as  a  class,  British 
bankers  were  as  much  paragons  of  careful  management  as  they 
were  profound  in  financial  acumen. 

Long,  as  we  have  seen,  had  big  bankers  sat  in  Parliament. 
They  still  did  so.  The  members  of  the  American  firm  of  J.  P. 
Morgan  &  Co.  were,  in  1933,  as  evidence  gathered  by  United 
States  Senate  investigators  showed,  directors  of  eighty-nine 
corporations  and  banks,  with  total  assets  of  more  than  twenty 
billion  dollars.  Whatever  the  reach  of  his  indirect  influence 
upon  legislation  in  America,  J.  Pierpont  Morgan  had  no  voice 
or  vote  in  Congress;  he  was  a  private  citizen.  But  the  entrench- 
ment of  bankers  in  Parliament  was  a  regular  feature  of  English 
politics.  Such  a  fixture  was  E.  C.  Grenfell,  Morgan's  partner  in 
his  London  firm.  Question  by  Senator  Gore:  "How  does  he 


362  AMERICA  STRIKES  BACK 

get  elected?"  Answer  by  J.  Pierpont  Morgan:  "He  is  the  senior 
member  of  the  City  of  London  [the  financial  district].  He  gets 
elected  right  along."  This  was  a  bit  of  testimony  in  a  Stock 
Exchange  investigation  made  in  1933  by  the  United  States 
Senate  Committee  on  Banking  and  Currency.1 

This  Committee's  sweeping  investigation  supplies  another 
notable  example  of  the  difference  between  the  American  way 
of  thoroughly  exposing  business  evils  and  the  perfunctory  scope 
of  British  and  other  European  methods.  The  series  of  great 
disclosures  brought  out  by  the  Committee  (with  merited  credit 
to  Ferdinand  Pecora,  its  counsel),  are  matters  of  recent  in- 
formation. The  spectacle  before  this  Senate  Committee  was 
unlike  any  witnessed  in  Britain  or  elsewhere.  The  enormous 
money  power  commanded,  and  the  lofty  standing  assumed,  by 
a  procession  of  American  ultra-conspicuous  bankers  were  not 
of  the  slightest  avail  to  save  them  from  merciless  questioning. 
Some  of  these  men  would  have  been  lordly  personages  in  Eng- 
land. Attempts  to  take  refuge  in  the  plea  that  certain  relations 
with  customers  were  "confidential"  met  with  stern  orders  to 
answer  questions.  With  the  recent  jailing  of  Sinclair  acutely  in 
memory,  the  squirming  witnesses  well  knew  the  penalty  await- 
ing them  if  they  refused.  As  the  truth  was  wrenched  out  of 
them,  one  after  another  were  proved  by  their  own  admissions 
to  have  been  greedily  intent  upon  enhancing  their  own  interests 
and  those  of  their  cliques  at  the  expense  of  the  investing  public. 

The  speculative  fever,  the  surging,  unbounded  optimism  of 
this  era  infecting  multitudes  were  such  that  costly  but  honest 
mistakes  of  judgment  were  widely  made.  But  numerous  lead- 
ing bankers  could  not  plead  this  excuse  for  their  juggling  opera- 
tions. Pools  were  organized  backed  by  campaigns  of  systematic 
stealthy  publicity  to  create  activity  in  certain  stocks,  and  fic- 
titious sales  were  engineered  to  give  the  impression  of  public 
trading  in  those  stocks.  "The  hearings  disclosed  on  the  part 
of  many  bankers,"  the  Senate  Committee  reported,  "a  woeful 
lack  of  regard  for  the  public  interest  and  a  proper  conception 
of  fiduciary  responsibility.  .  .  .  These  custodians  of  funds 
gambled  and  speculated  for  their  own  account  in  the  stock  of 
the  banking  institutions  which  they  dominated;  participated  in 


THE  TRUE  CONTRAST  363 

speculative  transactions  in  the  capital  stock  of  those  institu- 
tions which  they  were  paid  to  serve;  participated  in  and  were 
beneficiaries  of  pool  operations  .  .  .  bestowed  benefits  of  'pre- 
ferred lists'  upon  individuals  who  were  in  a  position  to  aid  and 
abet  their  plans.  .  .  ."  And,  capping  these  enormities,  they 
"restored  to  devious  means  to  avoid  the  payment  of  their  just 
Government  taxes."  2 

All  of  which  and  much  more  impelled  the  Senate  Committee 
to  say:  "The  record  is  a  severe  indictment  of  many  bankers." 
In  relating  J.  P.  Morgan  &  Company's  dealings,  the  Committee 
might  well  have  placed  in  juxtaposition  the  high-souled  claims 
made  by  the  elder  J.  P.  Morgan  before  a  House  of  Representa- 
tives Committee  (the  "Pujo  Committee")  more  than  twenty 
years  previously.  "The  first  thing  is  character,"  he  had  affirmed 
as  to  the  factor  influencing  his  firm's  dealings.  Character,  and 
not  primarily  money  or  property,  he  had  maintained,  was  the 
basis  upon  which  commercial  credit  was  given.  Wondering  if 
he  had  heard  aright,  the  committee's  counsel  repeated:  "Before 
money  or  property"?  Morgan:  "Before  money  or  anything 
else."  3 

Testimony  in  1933  threw  another  flood  of  light  upon  the 
character  of  J.  P.  Morgan  &  Company.  In  flotations  of  stock 
issues  that  firm  and  an  allied  banking  house  had  in  previous 
years  obligingly  allowed  "ground-floor"  or  secret  advantageous 
purchase  of  those  stocks  to  a  "preferred  list"  of  individauls. 
"This  'preferred  list,'  "  the  Senate  Committee  reported,  "in- 
cluded personages  who  at  the  time  of  the  private  offering  held 
prominent  governmental,  political  and  corporate  positions."  4 
Confidentially  permitted  to  buy  the  stocks  at  a  much  lower 
price  than  that  demanded  in  the  stock  market,  these  select 
groups  obviously  made  their  easy  gougings  of  profit.  The  bank- 
ing house  of  Kuhn,  Loeb  &  Company  also  had  its  "preferred 
list." 

From  1926  to  1930  prominent  banking  firms  had  sold  nearly 
eight  billion  dollars  of  foreign  bonds  to  the  American  public 
which,  by  reason  of  the  default — in  interest  at  least — of  many 
of  those  bonds,  the  Senate  Committee  reported,  had  been  the 
victims  of  a  "colossal  loss."  Thickly  coated  with  respectability, 
the  banking  house  of  Dillon,  Read  &  Company  had  sold  to 


364  AMERICA  STRIKES  BACK 

American  investors  $186,000,000  of  Brazilian  bonds,  of  which 
in  1933  a  net  total  of  $144,000,000  were  in  default.5  Other 
leading  bankers  had  disposed  of  large  bond  issues  of  like  char- 
acter. "A  glaring  instance"  was  the  sale  of  $90,000,000  bonds 
of  the  Republic  of  Peru,  and  another  heinous  instance  the 
floating  of  a  similar  amount  in  Chilean  bonds,  both  of  which 
issues  fell  into  default.6 

"Commercial  banks,"  the  Senate  Committee  reported,  "found 
a  fertile  field  for  purchases  of  security  issues  which  their  [the 
banks']  investment  affiliates  were  sponsoring.  These  banks, 
violating  their  fiduciary  duty  to  depositors  seeking  disinterested 
investment  counsel  from  these  bankers,  referred  these  deposi- 
tors to  affiliates  for  advice.  These  depositors  were  then  sold 
securities  in  which  the  affiliates  had  a  pecuniary  interest."  But 
this  "circumventing  of  the  law"  was  not  the  only  result.  There, 
for  example,  was  the  mighty  Chase  National  Bank  of  New 
York  City.  The  Chairman  of  its  executive  committee  was 
Albert  H.  Wiggin,  who  had  been  reputed  one  of  the  country's 
ablest  financiers.  Through  his  private  corporations  he  sold 
$10,596,000  of  Chase  National  Bank  "short."  Yet,  reported  the 
Senate  Committee,  Wiggin  had  sanctioned  a  pool  of  the  bank's 
affiliates  "allegedly  formed  to  stabilize  the  market  [for  the 
bank's  stock]  and  obtain  a  wider  distribution  among  the  invest- 
ing public  when  he  knew  that  the  bank  stock  was  selling  at  a 
'ridiculously  high  price.'  "  7 

Here  again,  for  the  thousandth  time,  was  proof  of  the  Ameri- 
can practice  of  sparing  neither  person  nor  name.  To  pursue 
Wiggin's  activities  one  step  further:  In  1933  he  had  retired  as 
the  bank's  chairman.  In  the  four-and-a-half  years  preceding, 
he  had  received  about  $1,500,000  in  salaries  and  bonuses  from 
the  bank.  Upon  his  retirement  the  executive  board  munificently 
voted  him  a  pension  of  $100,000  a  year  for  life.  Only  after  the 
general  scathing  criticism  that  followed  this  disclosure  was 
Wiggin  prompted  to  request  stoppage  of  the  pension. 

And  what  of  the  acts  of  the  bankers  heading  the  equally 
mighty  National  City  Bank?  One  will  be  mentioned.  In  1927 
that  bank's  employes  were  "permitted"  to  subscribe  to  its 
stock,  the  amounts  to  be  deductible  from  their  salaries.  After 
the  stock-market  collapse  late  in  1929,  a  particular  batch  of 


THE  TRUE  CONTRAST  365 

sixty  thousand  shares,  at  $200-$220  a  share,  was  allotted  to 
these  employes.  At  the  time  of  the  Senate  Committee's  bearings 
on  the  subject,  1933,  the  market  price  of  the  stock  had  dropped 
to  $40  a  share,  but  employes  were  held  to  payment  of  the  price 
specified  in  their  subscription  contracts.  "Most  of  the  employes 
after  paying  the  installments  from  December,  1929,  still  owed 
more  on  the  stock  than  it  was  worth  in  the  market  at  the  time 
of  the  hearing."  8  A  high  official  of  this  bank  was  selling  its 
stock  "short"  at  the  very  time  when  employes  were  being  in- 
duced or  expected  to  buy. 

In  many  American  cities  bankers  helped  the  speculative  ex- 
cesses by  making  large  bank  loans.  These  were  disastrously 
impaired  by  the  collapse  of  security  prices  that  gutted  bank 
resources  and,  in  various  sections,  forced  the  closing  of  group 
bank-holding  companies.  Such  were  some  of  the  multitude  of 
practices  resulting  in  the  passage  of  the  stringent  and  compre- 
hensive Securities  and  Exchange  laws. 

The  fullness  with  which  the  facts  were  brought  out  and  the 
frankness  with  which  they  were  spread  broadcast  had  their 
infuriating  effect  upon  the  American  public,  many  millions  of 
whom  were  impoverished  by  loss  of  money  or  jobs.  Too  often, 
the  common  man  was  convinced,  were  the  banker's  pretensions 
but  a  mask  for  the  infamies  of  a  financial  buccaneer.  One  can- 
did stock  trader  did  express  this  reality.  In  racy  American 
terms  he  told  the  Senate  Committee  that  Stock-Exchange 
manipulators  were  racketeers  on  a  scale  which  made  the  most 
outstanding  underworld  racketeer  "look  like  a  piker."  Not  to 
be  gainsaid  was  this  comparison.  A  dazed  investing  population, 
lost  in  wonder  as  to  how  its  money  had  vanished  (forty-three 
billion  dollars  or  more,  estimated  in  shrinkage  of  values),  now 
had  an  opportunity  to  see  behind  the  scenes  and  learn  much  of 
the  inside  working  of  a  system  cunningly  organized  to  ensnare, 
waylay  and  plunder. 

By  no  abuse  of  the  imagination  could  the  British  Parliament 
be  visualized  as  undertaking  even  a  similitude  of  such  a  vital 
probing  as  that  made  by  the  United  States  Senate  Committee 
on  Banking  and  Currency.  In  the  onset  of  the  great  depression 
the  Labor  Government  of  Britain,  late  in  1929,  found  itself 


366  AMERICA  STRIKES  BACK 

compelled  to  make  some  move.  It  appointed  a  committee  "to 
inquire  into  banking,  finance  and  credit."  Further,  in  empower- 
ing the  committee  to  "make  investigation  calculated  to  enable 
those  agencies  to  promote  the  development  of  trade  and  com- 
merce," it  meant  inquiries,  not  investigations  as  construed  in 
the  American  sense. 

There  were  not  wanting  causes  for  an  inquisition  patterned 
after  American  lines.  Except  the  bankers  themselves,  no  one 
really  knew  of  the  underlying  facts  of  management  and  how 
the  power  of  massed  money  was  used.  All  that  was  conveyed  to 
the  public  were  the  formal  reports  of  the  bank  heads,  and  these 
documents  were  taken  at  their  face  value  with  rarely  a  ques- 
tion. The  general  attitude  was  that  one  should  never  impugn  the 
honor  and  disinterestedness  of  bankers;  although  why  they 
should  be  robed  in  a  character  beyond  doubt  or  query  no  one 
ever  explained.  This  view  of  the  Moguls  of  the  banking  world 
had  become  traditional — so  much  so  that,  when  an  occasional 
voice  suggested  a  look  below  the  surface,  the  proposal  was  re- 
garded as  subversive  of  the  proprieties.  The  criticism  made  at 
this  time  in  Britain  was  not  of  the  conduct  but  of  the  policies 
of  many  of  that  country's  banks. 

In  this  respect  there  was  a  marked  difference  between  British 
and  American  banks.  In  America  banks  had  taken  the  lead  in 
financing  great  industrial  corporations  and  combinations.  Many 
British  banks  clung  to  old  ways  of  restricting  their  financing  to 
the  routine  avenues  of  commerce.  At  a  stage  when  there  was 
much  agitation  in  Britain  over  the  obsolescence  of  many  of  its 
industrial  plants  and  methods,  blame  was  cast  upon  banks  for 
the  backwardness  of  British  industry  in  not  modernizing — or 
as  the  phrase  went,  "rationalizing" — itself. 

However,  a  number  of  joint-stock  banks  did  deviate  from 
a  purely  banking  business  and,  for  one  reason  or  another,  be- 
come involved  in  control  of  industries.  This  of  itself  furnished 
a  provocation  for  inquiry.  A  greater  and  pressing  field  for 
severe  investigation  was  the  stock-promotion  business  which 
had  channeled  its  way  into  the  pockets  of  investors.  Of  the  hun- 
dreds upon  hundreds  of  companies  organized  in  the  boom 
years,  many  had  become  defunct;  and  hordes  of  embittered 
people  could  now  ruefully  ponder  upon  the  visions  held  out  to 


THE  TRUE  CONTRAST  367 

them  and  the  losses  incurred.  Americans  did  at  least  want  to 
know  how  they  were  duped  and  swindled.  Nor  was  this  mere 
curiosity.  By  knowing  the  men  who  did  the  "skull-duggery" 
and  the  processes  by  which  it  was  done,  there  was  ground  pro- 
vided for  punitive  action  and  for  tightening  laws.  But  in  Britain 
there  was  no  such  spirit.  A  characteristic  showing  of  the  spine- 
lessness  prevailing  there  was  contained  in  an  address  at  Edin- 
burgh, early  in  1930,  by  a  high  financial  authority,  R.  O.  Hob- 
son,  Editor-in-Chief  of  "The  Financial  News."  The  investor, 
he  urged,  should  be  protected  against  the  notorious  evils  of 
boom-company  promotion,  reckless  stock  flotations,  group 
finance  methods,  and  concealment  of  unfavorable  develop- 
ments. He  could  have  simplified  the  case  by  saying  trickery 
and  lying.  But  what  was  his  grand  remedy?  He  proposed  the 
co-operation  of  Press,  Law  and  Stock  Exchange  in  overcoming 
these  evils.  (In  America  the  first  and  most  natural  move  was 
to  call  for  an  investigation  that  would  bore  deep  and  supply 
facts  to  the  public  through  the  medium  of  newspapers  and 
otherwise.)  Where  the  British  press  was  to  get  the  basic  facts, 
Hobson  did  not  explain.  He  expected  the  London  Stock  Ex- 
change to  help  purify  itself!  Never  a  miracle  had  come  from 
that  body,  although  on  past  occasions  it  had  made  great  pre- 
tensions to  regeneration.  As  for  the  Law,  the  omnipotent  Law, 
he  certainly  must  have  known  of  the  succession  of  stock  jug- 
glery which  under  it  had  been  easily  accomplished,  leaving  the 
manipulators  in  full  and  honored  possession  of  booty. 

Editorializing  upon  J.  P.  Morgan's  testimony  before  the 
United  States  Senate  Committee,  "The  Economist,"  of  London, 
on  June  10,  1933,  made  this  acknowledgment  of  the  ravages  of 
financial  wolves  in  its  own  land: 

"There  is  no  reason  to  suppose  from  anything  that  has  so 
far  emerged,  that  Morgan's  acted  in  1929  in  any  other  way 
than  was  standard  practice  both  in  England  and  America  dur- 
ing the  boom  period.  Indeed,  when  the  whole  truth  is  told — if  it 
ever  is — it  will  probably  be  found  that  the  Morgan  partners 
were  far  more  cautious  and  conservative  than  most  people  at  a 
time  when  it  was  general  to  act  as  if  the  era  of  prosperity  would 
last  forever."  Criticizing,  nevertheless,  the  "preferred  list" 
favoritism,  the  editorial  went  on:  "Now  if  shares  could  be 


368  AMERICA  STRIKES  BACK 

rushed  up  to  fancy  prices  almost  immediately  the  issue  is 
floated — and  there  are  countless  similar  instances  in  our  own 
country  as  in  America — the  investment  banker  has  an  oppor- 
tunity of  enormous  profits  in  addition  to  his  commission." 

Here  was  an  obvious  need  and  an  opportunity  of  real  investi- 
gation of  the  ways  and  means  by  which  these  schemes  had  been 
operated  and  of  the  individuals  or  firms  responsible.  But  who 
composed  the  committee  appointed  by  the  Labor  Government? 
Headed  by  Lord  Macmillan,  it  comprised  bankers,  business 
men  and  some  labor  representatives.  Its  report,  submitted  in 
1931,  was  a  digest  of  a  subject,  not  an  investigation.  The  first 
part  was  a  historical  and  descriptive  view  of  the  gold  standard, 
and  dealt  with  Britain's  special  post-war  problems.  Recom- 
mendations formed  the  second  part.  Two  members  did  urge  the 
transformation  of  the  Bank  of  England  from  a  private  corpora- 
tion to  a  public  institution.  Apart,  however,  from  calling  at- 
tention to  a  bank  having  such  vast  powers  run  for  private 
profit,  there  was  no  scintilla  of  suggestion  that  the  way  in  which 
those  powers  had  been  used  should  be  thoroughly  investigated. 

As  a  whole  the  report  was  a  highly  technical  document.9  The 
point  considered  by  the  Committee  as  of  supreme  importance 
was  its  opinion  that  immediate  efforts  should  be  made  to  check 
the  violent  decline  in  prices  that  they  thought  was  endangering 
political  and  social  stability.  The  report  thus  took  its  worthy 
place  with  many  a  past  report,  in  its  adherence  to  instructions 
and  its  consequent  avoidance  of  a  course  which  might  induce  a 
different  kind  of  examination. 

And  here  this  narrative  may  properly  be  brought  to  an  end. 
The  historical  record  set  forth  has  shown  with  informative 
sufficiency  the  true  contrast  of  American  conditions  with  the 
practices  and  pretensions  of  countries  from  which  so  many 
criticisms  of  America  have  come.  Further  evidence  is  not  want- 
ing; on  the  contrary,  our  record  closes  in  the  face  of  an  embar- 
rassing wealth  of  it.  This,  if  it  had  been  incorporated,  would 
have  added  mass  but  not  more  weight  to  the  volume  of  telling 
facts  herein  detailed.  Surely,  no  further  evidence  is  needed  to 
dispose  of  the  legend  that  America  has  been  the  one  and  great 
exemplar  of  materialism.  In  view  of  the  authentic  record  here 


THE  TRUE  CONTRAST  369 

given,  the  fact  that  America  has  been  so  long  and  so  perti- 
naciously represented  as  such  is  certain  to  arouse  some,  if  not 
considerable  astonishment.  And,  what  is  more  to  the  point,  the 
contrast  here  presented  will  serve  to  supply  a  much-needed  en- 
lightening perspective  of  American  practices,  activities  and 
standards  as  measured  by  those  prevalent  in  various  other 
countries. 


NOTES  AND  INDEX 


NOTES 

CHAPTER  I 
FROM  LEGEND  TO  FACT 

1  "Words  to  the  Deaf:  An  Historian  Contemplates  His  Age." 

2  Act  of  28  Edward  I  and  Act  of  37  Edward  III.  Statutes  at  Large,  Great 
Britain  Parliament.  Vol.  I,  pp.  146  and  302.  Edition  of  1786. 

3  Act  of  5  Henry  IV,  Ibid.,  p.  420. 

4  Act  of  37  Edward  III,  Ibid.,  Vol.  1,  p.  302. 

6  Act  of  4  Edward  IV,  Ibid.,  Vol.  2,  pp.  11-12. 
«  Act  of  4  Henry  VII,  Ibid.,  Vol.  2,  p.  65. 

7  Act  of  13  Elizabeth,  Ibid.,  Vol.  2,  p.  610. 

8  Act  of  12  George  II,  Ibid.,  Vol.  6,  pp.  99-105. 

9  Act  of  30  George  II,  Ibid.,  Vol.  7,  p.  239.  My  italics. 

10  Act  of  13  George  III,  Ibid.,  Cap.  59. 

11  Act  of  9  and  10  William  III,  Ibid.,  Vol.  3,  pp.  687-688. 

12  Act  of  27  George  II,  Ibid.,  Vol.  7,  pp.  54-56. 

18  Act  of  14  and  15  Henry  VIII,  Ibid.,  Vol.  2,  p.  137,  repeated  and  ampli- 
fied in  1529  by  Star  Chamber  decree. 

14  Act  of  25  Henry  VIII,  Ibid.,  p.  172. 

*5  Act  of  33  Henry  VIII,  Ibid.,  p.  293. 

16  "The  Creative  Impulse  in  Industry,"  by  Helen  Marot,  p.  2.  (E.  P.  Dut- 
ton  &  Co.) 

1T  "Prospects  of  Industrial  Civilization,"  by  Bertrand  and  Dora  Russell, 
p.  171.  (The  Century  Co.) 

18  Syndicated  article  by  Glenn  Frank,  President  of  the  University  of  Wis- 
consin. 

19  It  is  unnecessary  to  give  the  laws  of  all  the  colonies  seeking  to  restrain 
these  frauds.  Laws  of  New  York  will  suffice  as  an  instance.  See  "Laws  of  the 
Colony  of  New  York,"  Vol.  Ill,  pp.  788-793;  Vol.  IV,  pp.  926-927,  and  Vol.  V, 
pp.  65,  67,  71-73,  193,  266-268,  292,  etc.,  covering  years  from  1750  to  1773. 

20  Acts  of  51   Henry   III,  "Statutes  at  Large,   Great   Britain  Parliament," 
Vol.  1,  pp.  186-187. 

21  Act  of  9  Henry  VI,  Ibid.,  Vol.  1,  pp.  497-498. 

22  Act  of  14  Charles  II,  Ibid.,  Vol.  3,  p.  240. 

23  Act  of  4  William  and  Mary,  Ibid.,  pp.  484-486. 

24  Act  of  2  and  3  Edward  VI,  Ibid.,  Vol.  2,  p.  223. 

25  Act  of  27  Elizabeth,  Ibid.,  p.  634. 

26  Act  of  1  James  I,  Ibid.,  Vol.  3,  p.  15. 

27  Act  of  12  Charles  II,  Ibid.,  pp.  182-184. 

28  Act  of  8  Queen  Anne,  Ibid.,  Vol.  4,  p.  398. 

29  Act  of  13  Elizabeth,  Ibid.,  Vol.  2,  pp.  616-617. 

80  Act  of  1  George  I,  Ibid.,  Vol.  5,  pp.  55-56  and  5  George  I,  Cap.  IL 

81  Act  of  21  George  III,  Ibid.,  Vol.  9,  p.  179. 

373 


374  NOTES 

CHAPTER  H 
"AN  ESSAY  UPON  NATIONAL  CHARACTER" 

1  Act  of  9  Henry  IV,  "Statutes  at  Large,  Great  Britain  Parliament,"  Vol.  1, 
p.  424. 

2  Act  of  2  and  3  Edward  VI,  Ibid.,  Vol.  2,  p.  411. 
*Act  of  21  Henry  VIII,  Ibid.,  p.  132. 

*Act  of  33  Elizabeth,  Ibid.,  Vol.  2,  pp.  666-667. 

5  Act  of  1  James  I,  Ibid.,  Vol.  3,  p.  27. 

6  Acts  of  9  George  II,  Cap.  37,  and  act  of  24  George  II,  Cap.  32. 

7  Acts  of  11  and  18  Henry  VI,  Vol.  I,  pp.  510  and  527. 

8  Act  of  4  Edward  IV,  Ibid^  Vol.  2,  pp.  11-12. 

9  Act  of  1  Richard  HI,  Ibid.,  p.  49. 

10  These  laws  were  passed  in   1513,   1514,  and  1534.  Acts  of  5,  6  and  23 
Henry  VIII,  Ibid.,  pp.  109  and  164. 

11  Act  of  27  Henry  VIII,  Ibid.,  p.  220. 

12  Acts  of  5  and  6  Edward  VI,  Ibid.,  pp.  427-432.  The  stricter  regulations 
prescribed  by  this  law  covered  five  pages  of  fine  type. 

13  Act  of  27  Elizabeth,  Ibid.,  p.  636. 

14  Act  of  27  Elizabeth,  Ibid.,  pp.  680-682. 
«  Act  of  2  James  I,  Ibid.,  VoL  3,  p.  63. 
ia  Act  of  20  James  I,  Ibid.,  pp.  101-104. 

17  Acts  of  13  and  14  Charles  II,  Vol.  3,  pp.  210-212;  7  and  10  Anne,  Ibid., 
Vol.  4,  p.  349  and  509-510;  6,  10,  11  and  13  George  I,  Ibid.,  Vol.  5,  pp.  191-193, 
354,  451 ;  and  various  acts  of  George  II. 

is  Act  of  6  George  IH,  Ibid.,  Vol.  7,  p.  581. 

CHAPTER  in 
ACANADA 

1  DeMeuIles,  a  French  official  in  Canada,  to  the  King  of  France,  1684,  "Re- 
port on  Canadian  Archives,"  1899,  p.  43.  The  volumes  of  these  archives  con- 
taining the  original  records  are  not  numbered,  but  bear  the  date  of  the  year 
in  which  they  were  issued  by  the  Archives  Bureau  of  the  Dominion  Govern- 
ment. 

2Biggar*s  "Early  Trading  Companies  of  New  France,"  Vol.  1,  pp.  15,  41-42. 

3  Thus,  in  his  Memoirs  concerning  Canada,  wrote  De  la  Chesnaye,  who  had 
gone  to  Canada  to  represent  the  interests  of  the  Company  of  Rouen.  "Report 
on  Canadian  Archives,"  1899,  Supplement,  p.  39. 

4  "Report  on  Canadian  Archives,"  1889,  p.  54. 

5  Ibid.,  p.  55. 

6  Ibid.,  p.  56. 

7  De  Brumath's  "Bishop  Laval,"  p.  113. 

8  Duchesenau's  correspondence   and  memoir  are  published  in   "Documents 
Relating  to  the  Colonial  History  of  New  York,  Paris  Documents,"  Vol.  IX, 
pp.  68,  120,  131,  135,  142,  ISO,  etc. 

9  "Report  on  Canadian  Archives,"  1899,  pp.  42-43. 

10  Ibid.,  1900,  p.  71. 

11  De  Brumath's  "Bishop  Laval,"  p.  173. 


NOTES  375 

12  "Documents  Relating  to  the  Colonial  History  of  the  State  of  New  York, 
Paris  Documents,"  Vol.  IX,  pp.  441-442. 

18  "Report  on  Canadian  Archives,"  1889,  pp.  290-291. 

14  "Report  on  Canadian  Archives,"  1899,  Supplement,  p.  227.  "Memorial  on 
Affairs  in  Canada  at  the  Present  Time  and  the  Settlement  of  Cape  Breton." 

16  "Report  on  Canadian  Archives,"  1899,  p.  227. 

CHAPTER  IV 
THE  LORDS  OF  TRADE 

1  The  many  volumes  of  "Documents  Relating  to  the  Colonial  History  of 
the  State  of  New  York,  London  Documents,"  are  replete  with  reproductions  of 
the  correspondence,  reports  and  orders  of  the  Board  of  Trade.  For  the  list 
see  Vol.  Ill,  p.  357;  Vol.  IV,  p.  101;  Vol.  V,  pp.  5,  471,  501,  522;  Vol.  VI, 
pp.  17,  24,  32,  35,  160,  etc.,  etc. 

2  Ibid.,  Vol.  IV,  pp.  39,  463,  535  and  582.  Bellomont  had  originally  been 
sent  to  New  England  on  the  special  mission  of  suppressing  piracy.  With  others 
he  fitted  out  the  ship  Adventure  for  Captain  Kidd  who  was  given  special  pow- 
ers to  arrest  pirates.  Kidd's  own  piratical  acts  led  Bellomont  to  arrest  him  at 
Boston,  where  he  had  come  under  a  promise  of  safety,  and  send  him  to 
England.  Bellomont  died  in  New  York  hi  1701. 

3/ta*.,  Vol.  IV,  p.  816. 

4  Ibid.,  Vol.  VII,  p.  564. 

6  Failure  to  fulfill  this  requirement  was  made  a  ground,  in  1746,  by  Arthur 
Dobbs  and  others  to  petition  Parliament  to  declare  the  Charter  void  and  for- 
feited, and  to  give  similar  powers  and  privileges  to  himself  and  associates. 
The  petition  was  rejected  on  August  10,  1748.  Parliamentary  Report,  House  of 
Commons  of  that  date  on  the  Hudson  Bay  Company. 

6  "Report  from  the  Select  Committee  on  the  Hudson  Bay  Company,  etc. 
House  of  Commons,"  1857,  p.  398,  and  Ibid.,  Appendix  No.  411,  p.  435. 

7  Only  an  epitome  of  this  remarkable  charter  has  been  here  given.  The  full 
text  is  spread  in  Ibid.,  Appendix  No.  XI,  Enclosure  A,  pp.  411-413. 

8  "Report  from  the  Committee  Appointed  to  Inquire  into  the   State  and 
Condition  of  the  Countries  Adjoining  Hudson  Bay,  and  the  State  of  Trading 
Carried  on  There,  1749,"  House  of  Commons  Reports  of  Committees,  Vol.  2, 
No.  215.  This  report  was  further  incorporated  in  "Imperial  Blue  Books  on  Af- 
fairs Relating  to  Canada."  Also  Pelley's  testimony  in  "Report  from  the  Select 
Committee  on  the  Hudson  Bay  Company,  House  of  Commons,  1857,"  Ap- 
pendix No.  XIII,  p.  344. 

9  "Report  from  the  Select  Committee  on  the  Hudson  Bay  Company,  etc. 
House  of  Commons,"  1857,  Appendix  No.  XIII,  pp.  427-428. 

10  "An  Account  of  Six  Years'   Residence  in   Hudson's   Bay,   from   1733   to 
1736  and  1744  to  1747,"  by  Joseph  Robson,  Late  Surveyor  of  the  Buildings 
to  the  Hudson  Bay  Company   (London,  1752),  pp.  55-56. 

11  These  and  an  abundance  of  other  facts  are  set  forth  in  the  "Report  from 
tbe   Committee  Appointed  to  Inquire  into   the  State  and  Conditions  of  the 
Countries  Adjoining  Hudson's  Bay  and  the  State  of  Trade  Carried  on  There," 
1749,  incorporated  in  Vol.  40  of  "Imperial  Blue  Books  Relating  to  Canada." 

12  The  full  report  is  published  hi  "Documents  Relating  to  the  Colonial  His- 
tory of  the  State  of  New  York,  London  Documents,"  Vol.  V,  pp.  614-617. 

™Ibid.,  Vol.  IV,  pp.  1051-1052. 


376  NOTES 

"  Ibid.,  p.  825. 

i*Ibid.,  pp.  597-629. 

""Laws  of  the  Colony  of  New  York,"  Vol.  1,  pp.  428-430.  The  notion  in 
the  colonies  that  Catholics  were  seditious  was  derived  from  English  laws  of 
which  colonial  laws  were  copies  or  paraphrases.  A  law  from  Queen  Elizabeth's 
reign  indicted  all  Catholics  as  "wicked  and  seditious"  and  secret  stirrers  of 
rebellion.  Later  English  laws  followed  the  same  line.  See  "Statutes  at  Large, 
Great  Britain  Parliament,"  Vol.  2,  pp.  660-662;  Vol.  3,  pp.  38-41,  44-50,  etc. 
(years  1593,  1604,  1605,  etc.). 

17  "Report  on  Canadian  Archives,"  1899,  p.  414. 

18  "Documents  Relating  to  the  Colonial  History  of  the  State  of  New  York, 
London  Documents,"  Vol.  V,  pp.  727-730,  and  Vol.  VI,  p.  527. 

19 1 bid.,  "Paris  Documents,"  Vol.  IX,  p.  953. 
*>Ibid.,  "London  Documents,"  Vol.  VII,  p.  613. 

CHAPTER  V 
RAGING  SPECULATION 

^Journal  of  the  House  of  Commons,"  Vol.  XI,  p.  595. 
*Act  of  8  and  9  William  III,  "Statutes  at  Large,  Great  Britain  Parliament," 
Vol.  3,  p.  657. 

8  Act  of  6  Anne,  Ibid.,  Vol.  3,  p.  280. 

*  Act  of  10  Anne,  Ibid.,  Vol.  4,  p.  542. 

8  Act  of  9  Anne,  Ibid^  Vol.  3,  pp.  457^68. 

CHAPTER  VI 
MONEY  MANIA  IN  FRANCE  AND  ENGLAND 

1MA  Full  and  Impartial  Account  of  the  Company  of  Mississippi,  Otherwise 
Called  The  French  East  India  Company"  (London,  1720),  pp.  11,  13,  etc. 

2 "The  Chimera:  or  the  French  Way  of  Paying  National  Debts  Laid  Open" 
(London,  1720),  pp.  6,  29,  30,  65  and  76. 

8  "The  Case  of  the  Borrowers  on  South  Sea  Loans  Stated"  (London,  1721), 
p.  5. 

*  Ibid.,  p.  7. 

8  "The  Works  of  James  Houstoun,  M.D.,  Containing  Memoirs,  of  His  Life 
and  Travels  in  Asia,  America,  and  Most  Parts  of  Europe,"  etc.  (London,  1735), 
pp.  120-121. 

6  "The  Case  of  the  Borrowers  on  the  South  Sea  Loans  Stated,"  p.  8. 

7  "A  Collection  of  the  Parliamentary  Debates  in  England"  (London,  1741), 
Vol.  7,  pp.  330-340.  The  declaration  of  the  Lords  Justices  did  not  include  the 
South  Sea  Company  and  other  chartered  corporations  with  enormous  capital- 
izations. 

8  Ibid.,  pp.  349-350. 

9  So  Luke  Owen  Pike  wrote  in  his  "History  of  Crime  in  England"  (London, 
1873),  Vol.  2,  p.  304.  Pike  asserted  that  the  company  was  the  Welsh  Copper 
Company  but  the  official  records  cited  show  differently. 

10  "A  Collection  of  the  Parliamentary  Debates  in  England,"  Vol.  7,  p.  351. 
Inserted  in  the  debates  is  an  historical  account  of  various  phases  of  the  South 
Sea  Company's  stock  operations 


NOTES  377 

11  Ibid.,  p.  353. 

12  Ibid.,  VoL  7,  p.  355,  containing  an  account  of  this  meeting  and  subse- 
quent developments. 

™Ibid.,  p.  361. 

CHAPTER  VII 
WHEN  BUBBLES  BURST 

1  These  figures  are  taken  from  Professor  George  Tucker's  "The  Theory  of 
Money  and  Banks  Investigated."  This  book,  published  in  1839,  embodied  th« 
best  account  written  of  the  Mississippi  Company's  financial  operations. 

2  These  are  typical  extracts  from  "The  South  Sea  Management  Detected," 
etc.,  and  "The  Case  of  the  Borrowers  on  the  South  Sea  Loans  Stated,"  pp.  4, 
5,  9,  and  7  and  8  respectively. 

3  "Memoirs";  Preface  and  pp.  105  and  117. 
*  Ibid,,  p.  126. 

6  "A  Collection  of  Parliamentary  Debates  in  England,"  Vol.  7,  p.  372. 
*Ibid.,  p.  384. 

7  Ibid.,  Vol.  8,  p.  9. 

8  Ibid.,  p.  11. 
*Ibid.,  p.  13. 

10  Ibid.,  pp.  14-15. 

11  Ibid.,  pp.  27-28. 
"  Ibid.,  p.  29. 

18  Ibid.,  pp.  38-40. 

14  The  seven  reports  were  published  as  an  Appendix  to  Ibid.,  Vol.  8.  See 
pp.  70,  95-96,  etc.  These  reports  showed  that,  aside  from  its  great  issue  of 
regular  stock,  the  South  Sea  Company  had  put  out  £1,213,575  of  fictitious 
stock  of  a  nominal  value  of  £574,000. 

>5Ibid.,  p.  40. 

™Ibid.,  p.  62. 

17  Ibid.,  pp.  55-56,  62. 

18  The  latter  history  of  the  South  Sea  Company  was  published  in  the  re- 
port "State  of  the  South  Sea  Company's  Affairs,  Great  Britain  Parliament, 
Sessional  Papers,"  1834,  Vol.  XLI,  No.  235. 

19  Ibid.,  p.  3.  Nearly  one-half  of  the  1,017  stock  owners  at  this  time  were 
small  holders,  most  of  them  receiving  incomes  of  from  £100  to  £200  a  year. 
Only  thirteen  stockholders  received  £2,000,  and  only  five  £4,000  a  year. 

20  The  details  of  the  arrangement  were  published  in  Vol.  XXXIX,  "Sessional 
Papers,"  1854,  No.  48. 

21  Under  the  pretence  of  gathering  a  supply  of  wheat  for  popular  benefit, 
he  built   storehouses,   crowded  them  with   wheat  and  cornered  the  market. 
"He  gave  such  serious  attention  to  this  speculation  that  those  admitted  to 
his  private  rooms  saw  on  his  desk  accurate  records  of  the  prices  of  wheat, 
day  by  day,  on  the  different  markets  of  his  kingdom."  Simultaneously,  lesser 
monopolies  in  the  king's  service  were  conducting  their  operations. — "The  Pri- 
vate Life  of  Louis  X,"  by  Mouffle  D'Angerville,  pp.  303-304.  (Boni  &  Liveright.) 

22  Act  of  7  George  H,  Cap.  8. 

23  "The  Complete  English  Tradesman  in  Familiar  Letters"  (London,  1732), 
Vol.  2,  p.  29. 

2*  "Horace  Walpole's  England,"  p.  46. 


378  NOTES 

CHAPTER  VIII 
SECRET  FRAUD  AND  THE  REVOLUTION 

1  Copious  details  from  documentary  sources  have  been  given  in  my  "History 
of  the  Great  American  Fortunes,"  "History  of  the  Supreme  Court  of  the  United 
States"  and  "History  of  Tammany  Hall." 

2  Hansard,  "The  Parliamentary  History  of  England,"  Vol.  XXVIII,  p.  458. 
These  volumes  gave  in  detail  the  debates  in  Parliament. 

3  Samuel  Johnson,  for  instance.  He  acknowledged  that  in  an  Exeter  Street 
garret  he  concocted  the  famous  speech  "on  the  atrocious  crime  of  being  a 
young  man,"  represented  to  have  been  made  by  Pitt  in  reply  to  sneering  ob- 
servations by  Walpole  upon  Pitt's  youth. 

4  Hansard,   "The  Parliamentary   History  of  England,"  Vol.  XIX,  pp.  205, 
210-211. 

8  Ibid .,  pp.  649-650. 
« Ibid.,  pp.  1089-1095. 

7  "The  Report  of  the  Commissioners  Appointed  to  Examine,  Take  and  State 
the  Public  Accounts  of  the  Kingdom,  Presented  to  His  Majesty  and  to  Both 
Houses  of  Parliament  by  William  Molleson,  Secretary  to  the  Commissioners, 
June  18,   1782"    (published  in   1783),  Vol.   1,  pp.  130-133. 

8  Ibid.,  Appendix  No.  5,  pp.  432-433. 

9  Ibid.,  p.  137.  The  Commissioners  presented  figures  of  the  highest  costs  of 
horses  and  wagons  and  hire  of  attendants,  and  the  amounts  charged  to  the 
Government.  The  price  of  labor  was  then  seven  pence  to  two  shillings  a  day. 

10  Ibid.,  pp.  133-135. 

11  Ibid.,  p.  444. 

12  Ibid.,   p.   136.   Cornwallis   testified  that   the   regimental   Quarter-Masters 
gave  the  Commissary-General  receipts  for  the  full  ration  without  distinguish- 
ing whether  it  consisted  of  provisions  obtained  from  England,  or  procured  in 
America  where  provisions  were  often  seized  or  bought  at  a  price  much  below 
the  European  price  (p.  433). 

18  Ibid.,  p.  143. 
"  Ibid.,  p.  144. 

15  What  became  of  this  money  was  a  mystery.  Of  Lincoln's  large  defalcation 
Burke's  "Peerage"   (1839  edit.  p.  765)   contained  not  a  word.  It  did  relate, 
however,  that  in  the  time  of  Queen  Anne,  Lincoln  so  ingratiated  himself  in 
the  graces  of  the  Earl  of  Torrington,  that  the  Earl  bequeathed  to  him  the 
greater  part  of  his  estates.  Summoned  in  1780  by  the  Commissioners,  the  Duke 
of  Newcastle,  Lincoln's  son,  informed  them  that  he   (Newcastle)    had  never 
had  any  of  the  public  money  possessed  by  his  father,  nor  any  of  his  accounts 
or  vouchers.   Further,  that  his  father  had  died  intestate,   leaving  him  and 
several  other  children,  then  infants,  and  that  such  effects  as  he  bequeathed  were 
administered  by  the  widow,  the  Countess  of  Lincoln. 

16  "The  Report  of  the  Commissioners,"  etc.,  p.  71. 
"76irf.,  p.  SO. 

18  Ibid.,  p.  65. 

19  Ibid.,  p.  27.  In  its  biography  of  Lord  Anthony  Falkland,  Burke's  "Peerage" 
(1839  edit.,  p.  394)  said  nothing  of  his  defalcation  but  it  did  say  that,  as  a 
member  of  the  House  of  Commons,  that  body,  on  January  17,  1693-1694,  de- 
clared him  guilty  of  a  high  misdemeanor  and  committed  him  to  the  Tower 


NOTES  379 

for  having  begged  and  received  £2,000  from  the  king,  contrary  to  the  ordinary 
method  of  obtaining  benefactions. 

20  "The  Report  of  the  Commissioners,"  etc.,  pp.  36-38. 

21  Ibid.,  p.   76.  The  Comissioners  reported  that  "so  large  a  sum  of  fees," 
paid  in  a  single  year  to  one  officer  "demanded  our  attention."  The  amount 
of  "poundage"  fees  in  1780  was  £39,198. 

22  Ibid.,  p.  85. 
28  Ibid.,  p.  80. 
**Ibid.,  p.  87. 
2*Ibid.,  p.  110. 
28  Ibid.,  p.  107. 

27  Ibid.,  p.  111. 

28  In  the  House  of  Commons  Henry  Flood,  during  a  debate,  told  its  members 
that  the  Commons  were  not  what  the  name  purported  but  were  merely  "a 
second-rate  aristocracy."  Hansard,  "The  Parliamentary  History  of  England," 
Vol.  XXVIII,  p.  458. 

29  "The  Report  of  the  Commissioners,"  etc.,  p.  72. 

80  "The  Parliamentary  History  of  England,"  Vol.  XXVIH,  p.  451. 

CHAPTER  IX 
AN  ONRUSH  OF  CRITICS 

1  "The   American   Museum   or  Universal   Magazine,"   July,   1788. 

2  Doc.  No.  91,  Eighth   Congress,   First  Session. 

3  "History  of  the  Phelps  and  Gorham  Purchase,"  pp.   140-144. 

4  "History  of  the  Holland  Company,"  N.  Y.  Assembly  Doc.  No.  224,  "As- 
sembly Documents,"  Vol.  3,  1837. 

6  See  for  example,  the  case,  in  1843,  of  William  Willinck,  Jr.  YS.  the  Morris 
Canal  and  Banking  Company  involving  litigation  growing  out  of  a  loan  of 
$750,000.  "New  Jersey  Chancery  Reports,"  Vol.  3,  p.  377. 

6  See  "Peters'  Reports,"  Supreme   Court  of  the  United  States,  Vol.  6,  pp. 
431-434.  Delivering  the  court's  decision  in  a  case  growing  out  of  this  transac- 
tion, Justice  Thompson  recounted  the  facts. 

7  "American  State  Papers:   Public  Lands,"  Vol.   1,  pp.  29-30. 
slbid.,  Vol.  2,  p.  253. 

9  See  "American  State  Papers:   Public  Lands,"  Vol.   1,  pp.   141-158.    (Doc. 
No.    74).    Also,    "Cranch's    Reports,"    Supreme    Court    of   the   United   States, 
Vol.  6,  p.  87. 

10  See  Judge  Huston's  historical  review,  written   some  years  later,   of  this 
contest   in   "Watt's  Reports"    (Supreme   Court   of  Pennsylvania),   Vol.   1,  pp. 
70-109.  On   the  ground  that   Indian   Wars  prevented   the  Holland   Company 
from  making  full  and  actual  settling  of  its  lands,  Chief  Justice  Marshall  of  the 
Supreme  Court  of  the  U.  S.  later  validated  the  Holland  Company's  title  to 
the  lands.  See  "Cranch's  Reports,"  Supreme  Court  of  the  United  States,  Vol. 
3,  pp.  1-73. 

11  "American  State  Papers:   Public  Lands,"  Vol.   1,  pp.  29-30. 

12  "American  State  Papers:  Public  Lands,"  Vol.  2,  p.  441.  The  report  does 
not  state  the  number  of  individuals.  But  that  a  great  part  of  this  vast  area 
was  held  for  speculative  purposes  is  distinctly  set  forth  in  the  report. 

18  "Travels  Through  the  States  of  North  America,  etc.,  During  the  years 


380  NOTES 

1795,  1796  and  1797."  I  am  quoting  from  the  third  edition,  brought  out  in 
London  in  1800,  Vol.  1,  pp.  126-127. 

i*Ibid.,  Vol.  1,  pp.  113-114. 

16 1  bid.,  Vol.  1,  p.  192. 

is  "The  Parliamentary  History  of  England,"  Vol.  XXXVI,  p.  833-834. 

17  "Great  Britain  Parliament,  Sessional  Papers,"  1831-1832,  Vol.  V,  "Report 
from  the  Select  Committee  on  the  Bill  Relating  to  the  Cruel  and  Improper 
Treatment  of  Animals,"  p.  73,  etc. 

18  "Travels  Through  the  United  States  of  North  America  and  Upper  Canada 
in  the  years  1795,   1796  and  1797."   (London,  1799),  pp.  xi  and  xii.  Roche- 
foucauld was  not  allowed  by  Lord  Dorchester,  having  supreme   jurisdiction 
in  Canada,  to  visit  Lower  Canada,  as  the  Province  of  Quebec  was  then  called. 

19  Ibid.,  Vol.  3,  pp.  31-32. 

20  Ibid.,  Vol.  4,  p.  577. 

21  Ibid.,  Vol.  4,  pp.  562,  579,  etc. 

22  "The  British  Critic,"  October,  1800,  p.  405,  in  a  review  of  his  volumes. 
28  "A  Tour   in   America,   in    1798,    1799   and    1800   Exhibiting   Society   and 

Manners,  and  a  Particular  Account  of  the  American  System  of  Agriculture." 
24  Ibid^  Vol.  I,  pp.  26,  30  and  31. 
28  Ibid.,  p.  26,  and  Vol.  2,  p.  652. 

26  Ibid.,  Vol.  2,  p.  652. 

27  "The  Stranger  in  America,"  by  Charles  William  Janson  (London,  1807) , 
p.  ix. 

28  "Travels  in  America,  Performed  in  1806,"  by  Thomas  Ashe  (London,  1808), 
Vol.  1,  pp.  3,  4,  63,  143,  etc. 

2«  "Travels  in  the  Interior  of  America  in  the  Years  1809,  1810  and  1811" 
by  John  Bradbury,  FJL.S.,  pp.  304-306.  His  book  was  privately  printed  in 
Liverpool  in  1817. 

30  "Travels  in  the  United  States  of  America  and  Lower  Canada  Performed 
in  the  Year  1817."  (London,  1818),  pp.  3  and  4. 

81  "The    Quarterly    Review,"   November,   1809,   pp.   321-327.   The    occasion 
chosen   for  the  attack  was  a  pretended  review  of  Abiel  Holmes'   "American 
Annals,"  under  cover  of  which  page  after  page  was  given  to  sheer  vilification 
of  Americans. 

82  "Great  Britain  Parliament,  Sessional  Papers,"  1803,  No.  122,  and  Ibid., 
1813-1814,  Nos.  206  and  207,  Vol.  XII. 

38  "Parliamentary  Debates,"  1807,  Vol.  9,  pp.  1001-1003.  H.  Thornton,  a 
member  of  Parliament,  and  one  of  the  company's  directors,  spoke  in  defence 
of  the  company. 

34  "The  Portfolio,"  November  21,  1801,  p.  271. 

*&Ibid.,  December,  1811,  pp.  585-587. 

86  "A  Discourse  Delivered  on  the  Day  Preceding  the  Annual  Commencement 
of  Union  College,  July  26,  1836,"  published  in  bound  volume,  pp.  15  and  55. 

CHAPTER  X 
IN  THEIR  OWN  LANDS 

1  See    Dispatch    of    Lieutenant-Governor    Stirling    of    Australia    to    George 
Murray,    Colonial    Department,    London,    January    20,    1830.    "Great    Britain 
Parliament,  Sessional  Papers,"  No.  675,  Vol.  XXI,  1830. 

2  "Great  Britain  Parliament,  Sessional  Papers,"  1822,  No.  448.  Vol.  XX. 


NOTES  381 

3  "Imperial  Blue  Books  on  Affairs  Relating  to  Canada,"  Vol.  X,  pp.  S3, 
63,  78-86,  etc. 

4  Usually  the  captain  informed  immigrants  that  they  need  not  take  along 
provisions  for  more  than  three  weeks  or  a  month — immigrants  then  had  to 
supply  their  own  food — he  well  knowing  that  the  average  passage  was  six 
weeks,  frequently  eight  or  nine  weeks.  Laying  in  a  large  stock  of  provisions, 
the  captain,  after  the  immigrants'  supply  had  run  out,  compelled  them  to  pay 
as  much  as  400  per  cent  on  the  cost  price  of  the  food  (which  often  was  bad) 
that  he  sold  to  them.  See  testimony  of  Quebec  immigrant  officers,  "Imperial 
Blue  Books  on  Affairs  Relating  to  Canada,"  Vol.  X,  Appendix  B.,  p.  83. 

6  "Report  on  Canadian  Archives,  Report  of  the  Archivist,"  1899,  p.  xiv. 

6  "Imperial  Blue   Books  on  Affairs  Relating  to  Canada,"  Lord  Durham's 
Report,  Vol.  X,  Appendix  B.,  pp.  86-87. 

7  "Report  on  Canadian  Archives,"  1899,  p.  xiii. 

8Borthwick's  "History  of  Montreal,"  p.  94.  Even  in  the  mid-nineteenth 
century  boys  as  young  as  eight  years  were  sentenced  to  Canadian  Penitentiaries 
in  which  tortures  and  other  cruelties  were  inflicted  by  keepers  upon  inmates. 
See  "Ontario  Legislative  Council  Sessional  Papers,"  1846,  No.  2,  Vol.  5,  Ap- 
pendix G  and  Ibid.,  Vols.  8  and  9,  Appendices. 

9  "Imperial  Blue  Books"  etc.,  Lord  Durham's  Report,  Vol.  X,  p.  92. 

10  "Report  on  Canadian  Archives,"  1892,  p.  145. 

11  Ibid.,  Note  E.,  pp.  135-136. 

12  Ibid.,  pp.  139-140. 

13  "Report   from   the    Select    Committee   of   the   Hudson    Bay    Company," 
House  of  Commons,  1857,  Appendix  No.  XVIH,  p.  449,  and  Appendix  XVI, 
pp.  444,  etc. 

14  Borthwick's  "History  of  Montreal,"  p.  398. 

15  "Report  from  the  Select  Committee  on  the  Hudson  Bay  Company"  etc., 
1857,  p.  326. 

16  "The  Parliamentary  History  of  England,"  Vol.  XXXVI,  p.  358. 

17  Niles'  "Principles  and  Acts  of  the  Revolution  in  America,"  etc.,  giving 
in  detail  the  proceedings  of  this  meeting,  p.  205. 

18  Perry  Walton's  "The  Story  of  Textiles,"  p.  174.  (George  SuHy  &  Co.) 

19  "The  American  Museum  or  Universal  Magazine,"  March,  1789,  and  May, 
1792. 

20  Seventy  members  of  the  House  of  Commons  were  elected  by  35  boroughs 
where  there  were  hardly  any  voters ;  90  were  elected  by  46*  boroughs  in  none 
of  which  the  voters  exceeded  50;  37  were  elected  by  19  boroughs  not  having 
more  than  200  voters;  20  more  elected  by  Scotland  counties  each  having  less 
than  100  electors,  etc.— "The  Parliamentary  History  of  England,"  VoL  XXX, 
pp.  787-799. 

21  "The  Parliamentary  History  of  England,"  Vol.  XXX,  p.  439. 

22  Ibid.,  p.  907. 

23  "Parliamentary  Debates,"  1807,  Vol.  9,  pp.  738-746. 

24  "The  Parliamentary  History  of  England,"  Vol.  XXX,  p.  439. 

25  "Report   of   Accountant-General,   Estimates   from   the   East   India   Com- 
pany, Great  Britain  Parliament,  Sessional  Papers,"  1802-1803,  1-50. 

26  The  figures  here  given  were  reported  in  "Great  Britain  Parliament,  Ses- 
sional Papers,"  1806,  No.  264,  "Report  of  the  Inspector  General  of  Exports 
and  Imports  of  Great  Britain." 

27  "Great   Britain   Census,   1800,"  Part   2,  p.  497.  The   British   census   was 
confined  to  population,  giving  number  of  houses,  occupants  and  occupations. 


382  NOTES 

The  United  States  census  was  restricted  to  number  of  population  and  its  di- 
vision into  whites  and  slaves. 

28  These    riots    caused    great    uneasiness    to    authority.    See    "Great    Britain 
Parliament,  Sessional  Papers,"  1812,  Vol.  1,  p.  209,  and  Ibid.,  1816,  Vol.  II, 
p.  755. 

29  "Reports  of  the  Proceedings  and   Debates  of  the   Convention   of   1821" 
(to  amend  and  revise  the  Constitution),  pp.  218,  221-222. 

30  Here  is  an   instance:    "America   has,   comparatively   speaking,   no   manu- 
factures; and  how  intimately  the  prosperity  of  the  arts  and  sciences  is  con- 
nected  with   these,   it   is   unnecessary   even   for   the   author  to   demonstrate." 
Janson's  "The  Stranger  in  America"  (London,  1807),  p.  xiii. 

31  "Great  Britain  Parliament,  Sessional  Papers,"  1803,  Vol.  VII,  "Minutes  of 
Evidence  Taken  before  the  Select  Committee  on  the  Bill  Respecting  the  Laws 
Relating  to  the  Woolen  Trade,"  pp.  34-35,  104,  119,   159,  etc.  Also  "Report 
from  the  Select  Committee  on  the  Woolen  Trade,"  1821,  pp.  62,  63,  68. 

32  Ibid.,  Vol.  II,  1812,  containing  two  reports  on  the  subject,  pp.  9-13. 
**Ibid.,  Vol.  V,  1819,  p.  23. 

**Ibid.,  Vol.  VI,  1817,  p.  285. 

8i  Ibid.,  1824,  Vol.  1,  No.  385,  and  1825,  Vol.  1,  No.  144. 

M  Ibid.,  1815,  Vol.  V,  pp.  24,  32,  33,  79,  97,  etc.,  and  1821,  Vol.  V,  pp.  4,  14. 

3T  These  figures  I  take  from  the  1830  edition  of  "The  American  Almanac," 
citing  "The  Englishman's  Almanac." 

38  "Studies  in  Millionaires,"  by  James  Bromley,  "Chambers'  Journal,"  1901, 
pp.  212-217. 

CHAPTER  XI 
AND  STILL  NO  CHANGE 

i"MetcaIf's  Reports"  (Supreme  Court  of  Massachusetts),  Vol.  1,  p.  111. 

2  While  "The  Edinburgh  Review"  constantly  reviled  America  it  did  occa- 
sionally print  truths  as  to  British  corruption.  Following  the  introduction  of 
a  bill  for  "the  better  securing  the  independence  and  purity  of  Parliament  by 
preventing  the  procuring  or  obtaining  of  seats  by  corrupt  practices,"  it  com- 
mented (February,  1811):  "At  present  seats  are  exchanged  for  various  equiva- 
lents;   some    for   money,    others    for   preferment,    others    for   titles."    But,    it 
pointed  out,  unless  the   bill   was  cautiously   drawn,   newer   ways   of  evading 
laws  could  be  found;  controlling  borough  voters,  noblemen  could  have  their 
creatures  elected,  dictate  their  votes  in  Parliament,  and  get  what  they  asked 
from  the  Ministry. 

3  The  dread  of  these   tumults,   feared  as  a   result   of   "universal"   suffrage, 
"excites  so  much  apprehension  in  this  country."  In  thus  stating   (December, 
1818)    "The  Edinburgh  Review"  admitted  that  no  tumults  had  occurred  in 
America. 

*  "Great  Britain  Parliament,  Sessional  Papers,"  1818,  Vol.  VI,  No.  276, 
pp.  7,  19,  51. 

5 "The  Resources  of  the  United  States  of  America;  or  a  View  of  the  Agri- 
cultural, Commercial,  Financial,  Political,  Literary,  Moral  and  Religious  Char- 
acter of  the  American  People,"  pp.  459,  460,  etc. 

6  "Sketches  of  America.  A  Narrative  of  a  Journey  of  Five  Thousand  Miles 
through  the  Eastern  and  Western  States  of  America,"  pp.  39,  48,  80,  166,  168, 
262,  273,  368,  etc. 


NOTES  383 

7  Robert   Walsh,   Jr.,   "An    Appeal    from   the   Judgments    of   Great   Britain 
Respecting  the  United  States  of  America,  an  Historical  Outline  of  their  Merits 
and  Wrongs  as  Colonies,  and  Strictures  upon  the  Calumnies  of  British  Writers," 
pp.  v-viii. 

8  "The   Records   of  the   Colony   of   Massachusetts   Bay   in   New  England," 
Vol.   2,  p.   167;   Vol.  4,  p.  486;   Vol.   5,  p.  414,  etc.  The  purpose   of   these 
early  schools  was  both  educational  and  religious.  Teachers  had  to  qualify  by 
orthodoxy  of  faith. 

9  "The  Public  Records  of  the  Colony  of  Connecticut,"  Vol.  2,  p.  176,  307- 
308;  Vol.  3,  pp.  9,  29,  158;  Vol.  4,  pp.  31,  97,  331;  Vol.  5,  p.  462. 

10  "Pennsylvania  Archives,  Fourth  Series,"  Vol.   1,  p.  31. 

11  This,  in  1812,  received  aid  from  the  State  school  fund,  and  was  further 
granted  the  support  of  a  city  tax. 

12  "History   of  the  Public  School  Society  of  the  City  of  New  York,"  by 
William  Oland  Bourne  (1870),  p.  15-16. 

13  "Parliamentary  Debates,"  1807,  Vol.  9,  p.  799. 

14  Ibid.,  pp.  1177-1178. 

15  Expenses  of  elementary  schools  were  now  borne  by  the  commons:   fees 
were  authorized  in  all  schools,  but  free  tuition  was  given  to  all  indigent  chil- 
dren; after  the  regular  school  hours,  schoolrooms  were  at  the  disposal  of  the 
several  religious  denominations. 

16Heinrich  von  Treitschke's  "History  of  Germany  in  the  Nineteenth  Cen- 
tury," Vol.  2,  p.  516.  (New  York:  McBride,  Nast  &  Co.) 

17  See  account  in  "Great  Britain  Parliament,  Sessional  Papers,"  1834,  Vol.  IX, 
"Report  from  the  Select  Committee  on  the  State  of  Education,"  pp.  41-44,  etc. 

18  "Great  Britain  Parliament,  Sessional  Papers,"  1818,  Vol.  IV,  "Reports  of 
Committees:  Education  of  the  Lower  Orders,"  p.  9. 

i»  Ibid. 

20  Ibid.,  pp.  58-59. 

21  "Parliamentary  Debates,"  1833,  Vol.  20,  p.  203. 

22  Ibid.,  p.  130. 

23  Ibid.,  p.  242. 

24  "Travels  through  Part  of  the  United   States  and   Canada   in   1818  and 
1819"  (Glasgow,  1823),  Vol.  I,  pp.  vii  and  110;  Vol.  2,  pp.  325-327,  328,  335. 

25  One  example  of  many  instances:    "There  is  no  subject  which   ought  to 
awaken  deeper  interest  than  that  of  free  and  common  education.  Let  it  be 
remembered  that  we  have  established  free  and  universal  suffrage.  Can  it  be 
doubted  that  the  means  of  common  education  ought  to  be  co-extensive  with 
this  right  .  .  .  ?"— "New  York  Evening  Post,"  December  17,  1828. 

26  "Annals  of  the  Boston  Primary  School  Committee,"  Compiled  by  Joseph 
M.  Wightman   (1860),  p.  53. 

27  "Journal  of  the  Rhode  Island  Institute  of  Instruction"  (1846-1847). 

28  "Ohio  Senate  Journal,"  1836,  pp.  606-607. 

29  "Travels  in  North  America  in  the  Years  1827-1828,"  Vol.  1,  pp.  216,  299, 
305,  307,  etc. 

30  "Great  Britain  Parliament,  Sessional  Papers,"   1825,  Vols.  VIII  and  IX, 
"Report  from  the  Select  Committee  of  the  House  of  Lords,  Appointed  to  In- 
quire into  the  State  of  Ireland,"  pp.  50,  61-66,  108-112,  570-571,  etc. 

31  "Parliamentary  Debates,"  1833,  Vol.  15,  p.  1154. 

32  "Sessional  Papers,"  1821,  Nos.  379,  562,  etc. 

33  "Great  Britain  Parliament,  Sessional  Papers,"  1826-1827,  Vol.  Ill,  Report 
No.  234,  pp.  14,  17,  32.  This  was  one  of  the  very  rare  occasions  on  which  the 


384  NOTES 

chairman   of  a  Parliamentary   select   committee   allowed  newspaper   reporters 
to  report  testimony. 

»*  "Parliamentary  Debates,"  1830,  Vol.  22,  pp.  727-734. 

86  Ibid.,  1837,  Vol.  37,  pp.  458-464  and  800. 

3«  "Great  Britain  Parliament,  Sessional  Papers,"  1818,  Vol.  VI,  No.  227. 
"Report  of  the  Select  Committee  on  the  Usury  Laws,"  pp.  3-19.  The  same 
evasion  of  usury  laws  was  common  in  Holland  and  other  European  countries. 

87  "The  American  Almanac"  for  1833,  p.  129,  citing  "The  New  York  Shipping 
and  Commercial  Register." 

38  Davenport's  "Gazetteer  of  North  America,"  1836,  pp.  46,  50-70,  82,  85-95, 
etc. 

39  "Great  Britain  Parliament,  Sessional  Papers,"  1836,  Vol.  XLV,  containing 
the  data.  The  British  census  of  1831  showed  24,410,429,  and  that  of  ten  years 
later,  27,019,558  population. 

CHAPTER  XH 
INSULAR  SELF-SATISFACTION 

1  "Parliamentary  History  of  England,"  Vol.  XIX,  pp.  187-192. 

2  "Great   Britain  Parliament,  Sessional  Papers,"   1805,  No.   172;    1813-1814, 
No.  225;   1816,  No.  161,  etc. 

s  "Parliamentary  Debates,"  1824,  NJ5.  Vol.  10,  p.  636. 
*  Ibid.,  Vol.  11,  p.  102. 
6  Ibid.,  p.  103. 

6  See  "The  Almanac  of  the  Fine  Arts,"  Edited  by  R.  W.  Buss   (London, 
1850),  p.  768. 

7  "Great  Britain  Parliament,  Sessional  Papers,"  1842-1843,  Vol.  XXIX,  "Re- 
port of  the  Council  of  the  School  of  Design,"  pp.  11-12. 

8  "The  New  Monthly  Magazine,"  London,  November,  1829. 

9  "Impressions  of  America  During  the  Years  1833,  1834  and  1835"  (London, 
1836),  pp.  345-346. 

10  "A  Letter  to  His   Countrymen,"  by  J.  Fenimore   Cooper   (New  York, 
1834),  pp.  3,  4,  59,  95-96. 

11  "The  Edinburgh  Review,"  January,  1833.  Also  Mill's  anonymous  article 
in  "The  Westminster,"  July,  1830,  telling:   "The  unfortunate  voter  is  in  the 
power  of  some  opulent  man;  the  opulent  man  informs  him  how  he  must  vote." 

12  "Parliamentary  Debates,"  1829,  N.S.  No.  21,  p.  1106. 

is  See  Samuel  Smiles'  "Lives  of  the  Engineers"  (1874),  Vol.  5,  p.  241. 

14  See  "A  Plan  of  Church  Reform.  With  a  letter  to  the  King."  By  Lord 
Henley  (London,  1832).  British  Government  returns  in   1827  showed  that  of 
10,533  benefices  in  England  and  Wales,  only  4,413  were  served  by  clergymen 
actually  resident. 

15  "Great  Britain  Parliament,  Sessional  Papers,"   1833,  Vol.  XX,  "Factories 
Inquiry  Commission,  First  Report,"  pp.  7,  15,  18-20,  25-31. 

16  "Parliamentary  Debates,"  1847,  Vol.  90,  p.   134.  Sir  A.  L.  Hay  pointed 
out  that  in  America  cotton  mill  spinners  received  higher  wages  and  were  given 
long  vacations. 

17  Ibid.,  1840,  Vol.  51,  p.  1226,  etc.  "Discontent  Among  the  Working  Classes." 

18  "Great  Britain   Parliament,   Sessional  Papers,"    1834,   Vol.  VIII,   "Report 
from  the  Select  Committee  on  Inquiry  into  Drunkenness,"  pp.  x,  362,  404- 
407,  etc. 


NOTES  385 

18  "Great    Britain    Parliament,    Sessional    Papers,"    1838,    Vol.    VIII,    "First 
Report  from  the  Select  Committee  on  Combinations  of  Workmen,"  pp.  167-168. 
20  "Parliamentary  Debates,"  1837,  Vol.  37,  pp.  170-178,  189,  198. 


CHAPTER  XIII 
A  CONFLICT  OF  OPINIONS 

1  "Views  of  Society  and  Manners  in  America,"  pp.  28,  312-314. 

2  "Democracy  in  America,"  pp.  vii,  33,  35,  206,  etc. 

3  "Aristocracy  in  America,  by  a  German  Nobleman,"  1839,  Vol.  2,  p.  S3. 

4  "America  and  the  American  People."  Citation  is  from  the  translated  edi- 
tion brought  out  in  New  York  in  1845,  pp.  445,  etc. 

5Treitschke,  "History  of  Germany  in  the  Nineteenth  Century,"  Vol.  4,  pp. 
210-211,  220-222,  240. 

6  "The  Founding  of  the  German  Empire  by  William  I,"  by  Heinrich  von 
Sybel,  Vol.  I,  p.  148. 

7  "Germany  and  Its  Evolution  in  Modern  Times,"  by  Professor  Henri  Lichten- 
berg,  pp.  11-12. 

8  "The  Americans  in  Their  Moral,  Social  and  Political  Relations,"  by  Francis 
J.  Grund  (2  vols.,  London,  1837). 

9  "Society,  Manners  and  Politics  in  the  United  States,"  by  Michael  Chevalier. 
The  citation  here  is  from  the  1839  Boston  edition,  p.  106. 

10  Ibid.,  p.  298. 

11  "A  Diary  in  America  with  Remarks  on  Its  Institutions,"  by  Captain  Fred- 
erick Marryatt,  C.B.  The  citation  here  is  from  the  edition  published  in  Paris 
in  English,  in  1839,  p.  7. 

12  For  example,"  "Memoirs   of  an  American  Lady,"  by  Mrs.  Anne  Grant 
(London,  1808).  She  described  America  as  a  land  "that  has  become  a  receptacle 
of  the  outcasts  of  society  from  every  nation  in  Europe."  And  much  more  to 
the  same  purport.  Pp.  206-209,  etc. 

13  Marryatt,  pp.  9,  207,  339. 

"See  "Great  Britain  Parliament,  Sessional  Papers,"  1839,  Vol.  XXXVIII, 
"Accounts  and  Papers,  Crime;  Committals;  Convicts,"  pp.  4,  366-369.  The 
number  of  death  sentences  did  not  imply  an  equal  number  of  executions.  Of 
every  hundred  sentenced  to  death  under  the  old  laws,  only  about  seven  to 
ten  had  been  actually  executed  —  a  considerable  number  for  robbery,  larceny, 
arson,  sheep  stealing,  cattle  and  horse  stealing,  house  breaking  and  other 
offences. 

15  "A  Picture  of  Parliament,"  "The  People's  Journal,"  March,  1847. 


17  "American  Notes"  (1842  edition),  p.  293. 

18  "Change  for  the  American   Notes,"   "By  an  American  Lady"    (London, 
1843). 

19  "The  Economist"    (London),  September   23,   1843.  This  periodical  addi- 
tionally described  itself  as  "a  political,  literary  and  general  newspaper." 

20  "Parliamentary  Debates,"  1840,  Vol.  53,  pp.  748  and  844. 

21  "Great  Britain  Parliament,  Sessional  Papers,"  1843,  Vol.  XXVI,  p.  349, 
and  Vol.  XXXI,  p.  377. 

22  Report  in  "The  Times,"  London,  December  23,  1844.  Also  "The  Econo- 
mist," December  28,  1844. 


386  NOTES 

23  "The  Railway  Monitor  of  the  Economist,  Weekly  Times  and  Bankers' 
Gazette"  (London),  October  4,  1845. 

2*Ibid.  Also  "Great  Britain  Parliament,  Sessional  Papers,"  1844,  No.  159, 
and  1845,  No.  637. 

26  See  the  numerous  stock-selling  advertisements  of  these  companies  in  "The 
Railway  Monitor  of  the  Economist,"  etc.,  throughout  1844  and  1845.  Also 
"The  Times"  (London),  hi  the  same  years.  Advertisements  of  banks,  insur- 
ance and  other  companies  showed  many  members  of  Parliament  on  their 
boards  of  directors. 

26  "The  Economist,"  July  20,  1844. 

27  "A  Short  Account  of  England's  Foreign  Trade  in  the  Nineteenth  Century," 
by  Professor  Arthur  L.  Bowley  (London,  1892),  p.  57.  (S.  Sonnenschein  &  Co. 
New  York:  Charles  Scribner's  Sons.) 

28  Ibid.,  p.  75. 

29  "Great  Britain  Parliament,  Sessional  Papers,"  1843,  Vol.  XII,  "Sanitary 
Report,"  pp.  38,  169,  197-199,  etc, 

30 "The  Times"  (London),  October  17,  1844.  An  investigation  showed  that 
the  same  conditions  prevailed  hi  Leeds,  Liverpool,  Birmingham  and  other  cities. 

31  "The  Economist,"  March  13,  1852,  credited  these  figures  to  an  article  "by 
a  writer  long  resident  hi  France,"  and  published  hi  "The  Westminster  Review," 
January,  1851.  I  have  been  unable  to  find  any  such  article  at  the  time  stated 
or  in  other  issues. 

32  "The  Economist,"  March  13,  1852. 

33  Upon  the  complaint  of  a  clergyman,  who  then  himself  sat  as  a  magis- 
trate, a  laborer  who  had  shot  a  hare  was,  in  1844,  at  Ashendown  Petty  Ses- 
sions, sentenced  to  pay  £5  and  costs,  or  serve  three  months'  imprisonment  at 
hard  labor.  To  a  poor  man  payment  of  such  a  mulcting  was  not  possible; 
consequently  to  jail  he  was  sent. 

CHAPTER  XIV 
POUNDS  STERLING  TRIUMPHANT 

1  "Travels  hi  North  America,"  by  Sir  Charles  Lyell  (London,  1845),  Vol.  1, 
pp.  71,  264,  268. 

2  See  "The  Continental  Monthly"  (New  York),  August,  1862,  giving  a  de- 
tailed account  of  McDonough's  life  and  will. 

8  "Parliamentary  Debates,"  1847,  3d  Series,  Vol.  91,  pp.  1008-1026. 

*Of  the  American  total,  exports  of  manufactured  products  amounted  to 
only  $15,601,899  or  about  £3,185,821,  while  the  bulk  of  Britain's  exports  were 
manufactured  articles — more  than  £19,000,000  of  cotton  goods,  nearly  £8,000,000 
of  woolen  fabrics,  £3,579,000  of  linen  cloths,  and  millions  of  pounds  more  in 
manufactured  yarn,  silk,  metal  and  brass  work  and  glassware. 

6  "Report  from  the  Select  Committee  on  the  Hudson  Bay  Company,"  etc. 
Great  Britain  Parliament,  1857,  p.  326,  etc.,  as  to  profits,  and  Appendix  17 
as  to  the  full  list  of  stockholders. 

6  "The  History  of  the  Great  American  Fortunes,"  Vols.  2  and  3. 

7  "Lord  Sydenham,  a  Biography,"  by  Adam  Shortt,  p.  251. 

8  "Statutes  of  Canada,"  1845,  p.  146. 

9  The  full  list  of  incorporators  is  given  in  "Imperial  Blue  Books  on  Affairs 
Relating  to  Canada,"  Vol.  27,  "Railways,"  pp.  7-8,  and  18-19  of  "Enclosure, 
Correspondence,"  etc. 


NOTES  387 

10  "Statutes  of  Canada,"  1848-1849,  p.  9. 

11  "Statutes  of  Canada,"  1853,  p.  362.  Often  after  having  acquired  charters, 
legislators   sold   or   leased   them   to   themselves,   as   heads   of    other    railways, 
profiting  exceedingly  thereby. 

12  Ibid.,  1852,  pp.  103-104. 
™lbid.,  1857,  pp.  622,  638. 

14  "Canada  Directory,"  1857-1858,  p.  628. 

15  The  complete  list  of  incorporators  is  set  forth  in  "Imperial  Blue  Books 
on  Affairs  Relating  to  Canada,"  Vol.  27,  "Railways,"  etc.,  p.  12  of  "Enclosure, 
Further  Correspondence." 

""Statutes  of  Canada,"  1849,  pp.  899,  916,  981,  1079;  1855,  pp.  821,  836, 
851,  etc.  There  were  many  other  instances  of  legislators  vesting  corporate 
charters  in  themselves  and  associates. 

17  See   Keefer,   "Eighty   Years'   Progress   of   British   North   America,    1781- 
1861,"  pp.  199-200. 

18  "Legislative    Council   Sessional   Papers,"   First   Session,    Fifth   Parliament, 
1854-1855,  Appendix,  A.A.A.A.,  incorporating  testimony  and  report. 

19  "Eighty  Years  Progress  in  British  North  America,  1781-1861,"  p.  209. 

20  Ibid.,  p.  208. 

21  "Legislative  Council  Sessional  Papers,"  etc.  Vol.  13,  1854-1855,  Appendix 
A.A.A.A.  See  also  Hincks'  "Reminiscences,"  p.  347. 

22  Keefer,  "Eighty  Years  Progress  in  British  North  America,  1781  to  1861," 
p.  209. 

23  Ibid.,  p.  210. 

24  "Dominion  Parliament,  Sessional  Papers,"  1869,  Vol.  2,  No.  7. 

25  "Legislative   Council   Sessional   Papers,    First    Session,    Fifth    Parliament," 
1854-1855,  Vol.  13,  Appendix  A.A.A.A.  giving  the  facts. 

26  The  full  testimony  of  the  ramifications  of  fraud,  bribery  and  plunder  are 
published  in  "Journal  of  the  Legislative  Assembly,  Province  of  Canada,"  1857, 
Appendices  to  the  15th  Vol.,  Appendix  No.  6. 

27  Ibid.,  1858,  Vol.  16,  Appendix  No.  4,  and  Vol.  17,  Appendix  No.  12. 

28  "Railway   Reform,"  by  David  Mills,  M.P.  in  "The  Canadian  Monthly 
and  National  Review,"  November,  1872.  pp.  438-439. 

29  "America  and  Europe"  (1857),  pp.  67-71. 

CHAPTER  XV 
A  CHANGE  OF  TACTICS 

1  "North  America,"  Vol.  1,  pp.  284-285. 

2  "Documents  of  the  [New  York]  Board  of  Aldermen,"  1861,  Vol.  XXVIII, 
No.  5. 

3  "North  America,"  Vol.  1,  pp.  290-291. 

4  Ibid.,  p.  147. 

5  See  Professor   Emerson   David  Fite's   detailed  and  excellent  book  "Social 
and  Industrial  Conditions  in  the  North  During  the  Civil  War"  (1910),  pp.  17- 
19,  etc.  (The  Macmillan  Company.) 

6  "North  America,"  Vol.  1,  pp.  147-148,  410-411,  425. 
T  "America  Before  Europe"  (1862),  pp.  370-371. 

8  "London,"  Vol.  4,  p.  17. 

9  "The  Economist,"  March  19,  1864. 

10  "Parliamentary  Debates,"  1867,  Series  3,  Vol.  186,  p.  1027. 


388  NOTES 

11  "A  Short  Account  of  England's  Foreign  Trade  in  the  Nineteenth  Century," 
p.  75. 

12  France's  merchant  marine  at  this  time  was  700,000  tons ;  Germany's  about 
the  same;    Britain's  5,500,000,  soon   to  expand  to   7,000,000.  Of  French  and 
German  vessels,  the  great  preponderance  consisted  of  sail,  and  only  one-tenth 
to  one-twelfth  of  steamships.  Britain  had  seven  and  twelve  tunes,  respectively, 
as  many  steam  vessels  as  they. 

""Parliamentary  Debates,"  1861,  3d  Series,  Vol.  161,  p.  1070. 

i*Ibid.,  pp.  1063-1065. 

«  See  "The  Economist"  (London),  July  6,  1861. 

« Ibid.,  Dec.  19,  1857. 

"  Ibid.,  Dec.  21,  1861. 

""The  Economist"  (London),  March  19,  1864. 

19  Ibid.,  January  13,  1866,  and  February  3,  1866. 

20  Ibid.,  April  16,  1864. 

21  "The  Spectator,"  of  London,  on  November  2,  1862,  gave  specific  details. 

22  "The  Quarterly  Review,"  July,  1863. 

23  "Chambers'  Journal"  (London),  March  15,  1862. 
24 "The  Times"  (London),  September  17,  1863. 
2«"The  Post"  (London),  June  9,  1867. 

26  "Report  of  the  Commissioners  on  the  Existence  of  Corrupt  Practices  at 
the  Last  Election  for  Members  to   Serve  in  Parliament  for  Lancaster,  with 
Evidence,"  Sessional  Papers,   1867,  Vol.  XXVII,  No.   1.  Also  "Parliamentary 
Debates,"  1867,  Series  3,  Vol.  186,  pp.  983-988. 

27  "Parliamentary  Debates,"  1867,  3d  Series,  Vol.  188,  p.  638. 

28  Ibid.,  Vol  187,  pp.  63-66.  An  official  compilation  covering  the  years  1830- 
1870  showed  that  during  the  tenure  of  successive  Prime  Ministers  of  both  parties 
171  new  peers  had  been  created.  "Great  Britain  Parliament,  Sessional  Papers,'* 
1871,  Vol.  LVI,  No.  81. 

2»"The  Economist,"  May  19,  1866. 

so  "The  Spectator,"  May  16,  1868. 

31  "Parliamentary  Debates,"  1870,  3d  Series,  Vol.  199,  p.  441. 

S2Ibid.,  Vol.  200,  pp.  240-241. 

**lbid.,  Vol.  202,  p.  906. 

CHAPTER  XVI 
"WANT  OF  SOUL  AND  DELICACY" 

1  Matthew  Arnold,  "Civilization  in  the  United  States— First  and  Last  Im- 
pressions," Boston,  1888,  pp.  112-113.  (Cupples  &  Kurd.) 

2  George   William    Erskine    Russell,    "Matthew   Arnold,"    New   York,    1904, 
pp.  119-129.  (Charles  Scribner's  Sons.) 

3  "Matthew  Arnold,  Prose  and  Poetry,"  New  York,  1927,  pp.  330-349.  The 
essay   on    "Equality"   was    originally   delivered   as   an    address  at   the    Royal 
Institution  (London),  and  was  printed  in  "The  Fortnightly  Review,"  March, 
1878.  (Charles  Scribner's  Sons.) 

*But  cf.  "Listeners  English  and  American,"  by  Vera  Brittain,  in  "The  At- 
lantic Monthly,"  June,  1935. 

6  Matthew  Arnold,  "Discourses  in  America,"  London,  1885,  New  York,  1906 
(The  Macmillan  Company),  pp.  65-66;  and  "Civilization  in  the  United  States," 
Boston,  1888,  pp.  183-187. 


NOTES  389 

•"Report  from  the  Select   Committee  on  Loans  to   Foreign   States,   Great 
Britain  Parliament,"  Sessional  Papers,  1875,  Vol.  XI,  p.  v. 
7  "Parliamentary  Debates,"  1875,  Vol.  223,  pp.  787-811. 
*Ibid.,  pp.  1150-1152. 

9  Ibid.,  p.  1451. 

10  See  account  in  Ibid.,  p.  1694. 

11  "Report  from  the  Select  Committee  on  Loans  to  Foreign  States,  Great 
Britain  Parliament,  Sessional  Papers,"  1875,  Vol.  XI,  pp.  xlv-xlix,  etc. 

12  "Parliamentary  Debates,"  1875,  3d  Series,  Vol.  225,  pp.  1824-1825. 

13  Ibid.,  Vol.  226,  pp.  232-235.  The  use  of  decayed  or  otherwise  dangerous 
ships  was  by  no  means  confined  to  Britain.  America  afforded  many  instances 
of  this  gruesome   business,  and  several   multimillionaire   fortunes   there  came 
partly  or  largely  from  great  profits  derived  from  their  operation  or  from  their 
sale  to   the  Union   Government  for  transport   service  during  the   Civil  War. 
See  "The  History  of  the  Great  American  Fortunes,"  Vol.  2,  pp.  125-137. 

14  "Great  Britain  Parliament,  Reports  on  Adulteration  of  Food,  Drinks  and 
Drugs,  Sessional  Papers,"  1854-1855,  Vol.  VIII,  Nos.  221  and  373;   1856,  Vol. 
VIII,  No.  1;  1874,  Vol.  VI,  No.  343. 

15  "Parliamentary  Debates,"  1875,  3d  Series,  Vol.  222,  p.  609. 

16  "Report  from  the  Select  Committee  on  London  Corporation  (Charges  of 
Malversation),    Great    Britain    Parliament,    Sessional   Papers,"    1887,    Vol.   X, 
No.  161,  pp.  iv-xiv. 

17  "Special  Report  from  the  Select  Committee  on  the  Merchandise  Act,  etc. 
Great  Britain  Parliament,  Sessional  Papers,"  1887,  Vol.  X,  No.  203,  pp.  41, 
90,  98,  141,  etc. 

(G.  W.  Steevens'  "The  Land  of  the  Dollar,"  referred  to  in  this  chapter,  was 
published  by  Dodd,  Mead  &  Co.) 

(Rudyard  Kipling's  "Letters  of  Travel,*'  referred  to  in  this  chapter,  was 
published  by  Doubleday,  Page  &  Co.) 


CHAPTER  XVII 
SPEAKING  OF  COMPARISONS 

1  "The  American  Commonwealth,"  Vol.  2,  pp.  24-25  and  207.  (Macmfllan  & 
Co.,  London.) 

2  "Great  Britain  Parliament,  Report  of  the  Select  Committee  on  the  Cale- 
donian and  other  Railway  Companies,  Sessional  Papers,"  1890,  Vol.  XI,  No.  27. 

3  For  an  account   of   the  Broadway   franchise   bribery   and  its  results,   see 
"The  History  of  Public  Franchises  in  New  York  City,"  pp.  137-144. 

4  "Jonathan  and  His  Continent"  (New  York  edition,  1889),  pp.  20-27.  (Cassell 
&   Co.) 

5  United  States  Senate  Report,  No.  1394,  1893. 

6  Testimony    "United    States   Committee   on   Education   and   Labor,"    1883, 
Vol.  3,  p.  405. 

7  "The  Diamond  Mines  of  South  Africa,"  by  Gardner  F.  Williams,  M.A., 
General  Manager  of  the  DeBeers  Consolidated  Mines,  Limited,  pp.  281-288. 

8  "Diamonds  and  Gold  in  South  Africa,"  by  Theodore  Reunert,  M.  Inst., 
M.E.,  etc.,  published  at  Cape  Town  and  Johannesburg,  1893,  p.  39.  This  book 
was  a  serious  account  dealing  with  conditions  technical,  financial,  social,  and 
other. 


390  NOTES 

8  Ibid.,  pp.  42-43. 

10  "The  Economist,"  London,  March  10,  1888. 

"  Ibid.,  June  20,  1891. 

12  Reunert,  "Diamonds  and  Gold  in  South  Africa,"  p.  120. 

13  Report   of   David   Magdola   of  the   Transkeian   General   Council,   "Great 
Britain  Parliament,  Sessional  Papers,"  1904,  Vol.  LXII,  "Correspondence  Re- 
lating to  the  Conditions  of  Native  Labor  Employed  in  the  Transvaal  Mines," 
p.  28. 

14  Ibid.,  p.  46. 

16  "Native  laborers  are  being  sjamborked  and  beaten,  and  ill-treated  in  many 
other  ways  by  their  European  overseers  and  indumas;  so  much  so  that  the 
boys  [native  workers]  wish  to  call  back  the  days  of  the  Republic,  when  the 
Boer  dominated,  stating  that  they  were  better  treated  then  and  received 
better  wages  for  their  work.  This  brutal  treatment,  combined  as  it  is  with  very 
low  wages,  is  enough  to  keep  natives  away  from  Johannesburg."  Report  of 
Chief  Sipendu,  delegate,  on  his  visit  to  Johannesburg.  Ibid.,  p.  27. 

16  "Great   Britain   Parliament,    Sessional   Papers,"    1904,   Vol.   LXII,   Africa, 
No.  3,  "Correspondence   Respecting  Introduction  of   Chinese  Labor  into  the 
Transvaal." 

17  "Parliamentary  Debates"  (1913),  N.S.  Vol.  54,  pp.  515-520  and  796.  The 
death  rate  among  native  negro  mine  workers,  one  member  of  Parliament — 
Fell — stated,  was  seven  times  greater  than  among  the  Chinese  formerly  em- 
ployed at  the  mines.  Harcourt  did  not  agree  to  that  precise  figure,  but  he 
admitted  that  the  mortality  was  many  times  greater  than  in  former  years. 

18  P.  Collier,  "America  and  the  Americans — From  a  French  Point  of  View," 
1897,  p.  140.  (Charles  Scribner's  Sons.) 

19  Paul  Bourget,  "Outre-Mer;  Impressions  of  America,"  1895,  pp.  149,  423, 
et  seq.   (Charles  Scribner's  Sons.) 

20  "The  American  Commonwealth,"  Vol.  2,  p.  604. 

CHAPTER  XVIII 
"THE  BITCH-GODDESS  SUCCESS" 

^'The  Philosophy  of  William  James,"  with  Introduction  by  Horace  M. 
Kallen.  (The  Modern  Library.) 

2H.  G.  Wells,  "The  Future  in  America.  A  Search  After  Realities,"  1906, 
pp.  90-100.  "He  complained  sourly  that  American  magazine  editors  sought 
him  out  only  after  he  became  famous,  but  had  neglected  him  in  the  days  of 
his  early  struggles" — Extract  from  an  article  "Magazine  Scouting  Abroad" 
by  William  C.  Lengle,  Associate  Editor,  "Liberty"  Magazine,  and  former  As- 
sociate Editor,  "Cosmopolitan  Magazine"  in  "The  American  Spectator,"  Oc- 
tober, 1934.  (Harper  &  Bros.,  published  Wells'  book.) 

3  Arnold  Bennett,  "Your  United  States.  Impressions  of  a  First  Visit."  (Harper 
&  Bros.) 

4  John  Moody,  "The  Truth  about  the  Trusts,"  1904,  pp.  xi,  xx. 

6  "Great  Britain  Parliament,  Sessional  Papers,"  1909,  Vol.  LXVII,  "Report 
of  the  Royal  Commission  on  Shipping  Rings,"  pp.  85,  91,  114. 

6  "The  Economist,"  London,  April   14,   1900,  which   advised:    "It  behooves 
investors  to  look  closely  into  the  question  of  capitalization,  and  particularly 
the  loading  of  good-will." 

7  Ibid.,  December  26,  1896,  "Stock  Watering  in  Excelsis." 


NOTES  391 

8  "The  Economist,"  London,  March  8  and  April  25,  1896. 

9  "The  Spectator,"  London,  August  20,  1898. 

10Hooley's  testimony  and  that  of  other  witnesses  was  stenographically 
reported  in  "The  Times,"  of  London,  on  July  28,  August  2,  11,  13,  16,  23, 
November  3,  8,  IS,  etc.,  1898. 

11 U.  S.  Senate  Report  No.  485,  Fifty-third  Congress,  Second  Session,  June 
21,  1894. 

12  "The  Spectator,"  London,  November  19  and  5,  1898. 

i«  "The  Economist,"  February  3,  1912. 

i*  "Parliamentary  Debates,"  1914,  Vol.  62,  pp.  1794-1795. 

16  "London  Gazette,"  December  20,  1889. 

16  "Great  Britain  Parliament,  Sessional  Papers,"  1900,  Vol.  XLV,  "British 
South  Africa  Company,"  pp.  37-42. 

1T  Seventeenth  annual  stockholders'  meeting,  "The  Economist,"  London, 
February  14,  1912. 

18  "Parliamentary  Debates,"  1900,  Vol.  88,  pp.  397-421. 

™Ibid.,  1913,  N.S.  Vol.  50,  p.  1637,  and  Vol.  51,  pp.  551-552. 

*>Ibid.,  1912,  N.S.  Vol.  42,  pp.  667-726. 

21  Ibid.,  1913,  N.S.  Vol.  54,  pp.  556-557,  670. 

CHAPTER  XIX 
RUBBER  MADNESS  AND  WORLD  TRADE 

1  "Great   Britain  Parliament,   Sessional  Papers,"   1904,  Vol.   LXII    (Africa, 
No.  14),  pp.  2-3. 

2  Ibid.,  pp.  9-16. 

3  Ibid.,  1904  (Africa,  No.  1),  "Correspondence  and  Report  from  the  British 
Consul  at  Boma,"  pp.  31-65. 

4  Ibid.,  1912-1913,  Vol.  LIX,  "Correspondence  Respecting  the  Affairs  of  the 
Congo,"  pp.  1-4,  6-8. 

6  Ibid.,  pp.  23-24. 

6  "Great  Britain  Parliament,  Sessional  Papers,"  1912-1913,  Vol.  LIX,  "Report 
on  the  Alienation  of  Native  Lands  in  the  Gold  Coast  Colony  and  Ashanti," 
p.  9. 

7  Ibid.,  1909,  Vol.  XL,  "Report  of  the  Committee  of  Inquiry  into  the  Liquor 
Trade  in  Southern  Nigeria,"  pp.  4-23. 

8  "The  Economist,"  London,  January  2,  1909. 

9  One  of  numerous  instances:  Maple  and  Company,  big  British  manufacturers 
of  house  furnishings,  maintained  stores  in  London,  Paris  and   Buenos  Aires. 
From  1908  to  1911  the  company  paid  annual  dividends  of  12  to  15  per  cent 
on  the  common  stock,  and  it  additionally  placed  amounts  in  its  reserve  funds. 
Assurances  at  a  stockholders'  meeting  in  London  that  the  company  had  proved 
its   capacity   for  substantially  increasing   dividends  was   greeted   by   a   stock- 
holders' outburst  of  "Hear,  hear."  "The  Economist,"  London,  March  2,  1912. 

10  "Great   Britain   Parliament,  Sessional  Papers,"    1913,  Vol.  XIV,   "Special 
Report  on  Putumayo  Atrocities,  with  Proceedings  of  the  Committee,"  pp.  iv- 
xx.  Also,  "Parliamentary  Debates,"  1913,  Vol.  56,  p.  2327. 

11  "The  Economist,"  London,  May  4,  1912. 

12  Ibid.,  April  26,  1913. 
™Ibid.,  March  22,  1913. 

14 These  mines  were  very  ancient.  Probably  the  Phoenicians  worked  them; 


392  NOTES 

the  Carthaginians,  Romans  and  Moors  certainly  did.  In  a  spasmodic  way  they 
were  worked  for  centuries  by  the  Spanish  Government  until  1873,  when  the 
Rothschilds'  Rio  Tinto  Company  acquired  them. 

« "Japan  in  the  Beginning  of  the  20th  Century,"  Published  by  Japan's 
Department  of  Agriculture  and  Commerce,  Tokio,  1904,  pp.  412-413. 

16  "Fifty  Years  of  New  Japan,"  1919,  Vol.  2,  p.  567. 

17  Ibid, 

i-8  Ibid.,  Chapter  on  "Joint  Stock  Enterprises  in  Japan,"  by  Baron  Yeiichi 
Shibusawa,  president  of  the  First  National  Bank,  Vol.  1,  pp.  474-475. 

19  "The  Political   Development   of   Japan,   1867-1909,"   by   George   Etsujiro 
Uyehara  (1910),  pp.  266-268.   (London:   Constable  &  Co.) 

20  The  annals  of  official  corruption  would  compel  an  extended  account.  A 
recent  instance  will  be  noted:   A  bribery  scandal  in   July,   1934,  involved  a 
Vice-Minister  of  Finance,  two  Cabinet  Ministers  and  others,  and  caused  the 
resignation    of   Premier   Saito    and   his    Cabinet.    The    scandal    concerned   the 
alleged  acceptance  of  bribes  to  facilitate  a  large-scale  manipulation  of  Imperial 
Rayon  shares. 

21  William  Harbutt  Dawson,  "The  Evolution  of  Modern  Germany,"  London, 
1908,  pp.  vi,  10-14,  etc.  (T.  Fisher  Unwin.) 

22  "The  Economist,"  London,  April  6,  1912. 

23  Ibid.,  March  23,  1912. 

24  "Report  of  the  Committee  Appointed  Pursuant  to  House  Resolutions  429 
and  504  to  Investigate  the  Concentration  of  Money  and  Credit,"  February 
28,  1913,  pp.  159-160. 

25  "Report  of  Investigation  of  the  Financial  Affairs  of  the  New  York,  New 
Haven   &   Hartford   Railroad   Company,"   Interstate   Commerce   Commission, 
No.  6569,  1914,  pp.  1-39. 

CHAPTER  XX 
ARMAMENTS  AND  PROFITEERING 

1  House  Report  No.  1468,  Fifty-third  Congress,  Second  Session, 

2  "The  Economist,"  London,  June  5,  1915. 

3  Ibid.,  June  3,  1916. 
*Ibid.,  June  9,  1917. 

5  See  the  account  in  "Krupp's  and  the  International  Armaments  Ring,  the 
Scandal  of  Modern  Civilization,"  by  H.  Robertson  Murray,  London  (1915?), 
pp.  152-155.  (London:  Holden  &  Haringham.) 

«"The  Naval  Annual,"  1906,  p.  107. 

7  "Parliamentary  Debates,"  1911,  N.S.  Vol.  24,  pp.  453  and  845. 

8  "Alleged   Activities   at   the    Geneva    Conference.   Hearings   Before  a   Sub- 
Committee  on  Naval  Affairs,  U.  S.  Senate,"  1929  and  1930,  pp.  508-509. 

9  See  "U.  S.  Senate  Document,  No.  415,  64th  Congress,  First  Session,  Final 
Report  and  Testimony,   Commission   on  Industrial   Relations,"   1916,   Vol.   8, 
pp.  7897-7916,  Vol.  9,  pp.  8715-8730,  etc. 

10  "Parliamentary  Debates,"  1913,  N.S.  Vol.  46,  pp.  186  and  984. 

11  See  the  shining  but  partial  list  in  H.  Robertson  Murray's  book,  pp.  162, 
173-174. 

12  "The  Economist,"  London,  April  29,  1922. 
™Ibid.,  June  9,  1923. 


NOTES  393 

id.,  January  1,  1921. 

15  Ibid.,  June  2,  1917. 

16  Ibid.,  June  1,  1918. 

17  "Parliamentary  Debates,"  1919,  Vol.  N.S.  114,  p.  2481,  and  Vol.  US,  p.  217. 

18  See  pp.  48-56.  Lehmann-Russbiildt  pointed  out  that  in  fictional  disguises, 
the  best  known  of  which  was  "The  Man  in  the  Shadow,"  the  story  of  Zara- 
hoff's  life  had  been  written.  "But,"  he  added,  "there  is  no  need  to  resort  to 
fiction ;  the  available  facts  are  picturesque  and  astonishing  in  themselves."  (Alfred 
H.  King.) 

19  "The  Saturday  Review,"  London,  January  20,  1917. 

20  "The  Economist,"  London,  January  20,  1917. 

21  "The  Saturday  Review,"  London,  August  18,  1917. 

22  "Great  Britain  Parliament,  Sessional  Papers,"  1919,  Vol.  V,  "Special  Re- 
port from  the  Select  Committee  on  High  Prices  and  Profits,  together  with  the 
Minutes  of  Evidence,"  pp.  3,  13. 

23  "Parliamentary  Debates,"  1919,  N.S.  Vol.  119,  pp.  926,  995,  1010,  etc. 
**Ibid.,  1919,  N.S.  Vol.  115,  pp.  469-471. 

CHAPTER  XXI 
A  SERIES  OF  EXHIBITS 

1"The  New  York  Times,"  May  12,  1920. 

2  "My  Impressions  of  America"  (New  York),  1922,  p.  200.  (George  H.  Doran 
&   Co.) 

3  "America  Revisited"  (Boston),  1924,  pp.  4  and  49.  (Little,  Brown  &  Co.) 
*See  G.  B.  Shaw's  signed  article  in  "The  New  York  Times,"  December  19, 

1930. 

5  "The  Congressional  Record,"  Seventieth  Congress,  Second  Session,  Vol.  70, 
Part  I,  p.  682. 

6  Cable  despatch  published  in  "The  World,"  New  York,  October  12,  1925. 

7  See   "Representative   International   Cartels,   Combines  and   Trusts,"   U.   S. 
Department  of  Commerce,  Bureau  of  Foreign  and  Domestic  Commerce,  Trade 
Promotion  Series,  No.  81,  1929,  pp.  45,  73,  etc. 

8  "The  Economist,"  London,  May  29,  1926. 

9  "Parliamentary  Debates,"  1904,  Fourth  Series,  Vol.  129,  p.  163. 

10  Ibid.,  Vol.  130,  p.  900. 

11  "Great  Britain  Parliament,  Sessional  Papers,"  1918,  Vol.  XIII,  No.  789. 

12  "The  Economist,"  February  9,  1924. 

13  See  their  "The  National  Income,  1924,"  giving  the  data. 

14  "Installment  Selling  of  Motor  Vehicles  hi  Europe,"  U.  S.  Department  of 
Commerce,  Bureau  of  Foreign  and  Domestic  Commerce,  Trade  Information 
Bulletin,  No.  550,  1928. 

15  "The  Economist,"  London,  December  18  and  25,   1926,  and  January   1, 
1927,  with  the  additional  observation:   "Something  like  90  or  95  per  cent  of 
our  capital  is  British  owned,  while  the  greater  part  has  crossed  no  sea  wider 
than  the  Irish  channel." 

16  Ibid.,  July  19,  1930. 

17  Ibid.,  December  8,  1928. 

18  Ibid.,  June  18,  1927. 

19  Ibid.,  December  8,  1928. 


394  NOTES 

20  Ibid.,  December  24,  1927.  The  company's  capital  had  been  doubled  in 
1920;  hence  care  was  taken  to  point  out  that  this  great  profit  was  on  original 
investment.  Figuring  on  old  and  new  stock  the  total  was  552^2  per  cent. 

21  Ibid.,  December  21,  1929.  Address  of  Chairman  of  Scindia  Steam  Naviga- 
tion Company,  Bombay. 

22  See  "Kings  of  Commerce,"  by  Thomas  C.  Bridges  and  H.  Hessell  Titlman 
(London),  1928.  Before  this  time  wealthy  commercial  men  had  usually  been 
eulogized  as  "great  traders."  Such  was  the  distinction  accorded,  for  instance, 
to  Sir  Robert  Jardine  and  to  his  son  of  the  same  name,  the  one  succeeding  the 
other  as  head  of  a  firm  which  had  long  held  an  almost  complete  monopoly  of 
the  importation  of  Indian  opium  into  China.  The  paternal  Jardine  had  made 
so  extensive  a  fortune  as  to  bequeath  to  his  son  a  sum  estimated  at  $20,000,000 
and  an  estate  of  200,000  acres  in  Scotland.  Sir  Robert  Jardine,  the  son,  died  in 
1927. 

(Mencken's  "Notes  on  Democracy,"  referred  to  in  this  chapter,  was  published 
by  Alfred  A.  Knopf.) 

(Dean  Inge's  "Outspoken  Essays,"  referred  to  in  this  chapter,  was  published 
by  Longmans,  Green  &  Co.,  London  and  his  "England"  by  Ernest  Benn,  London.) 

CHAPTER  XXII 
UNCLE  SHYLOCK 

1  See  "American  Direct   Investments  in  Foreign  Countries,"  United  States 
Department  of  Commerce,  Bureau  of  Foreign  and  Domestic  Commerce,  Trade 
Information  Bulletin,  No.  731,  1930,  pp.  8,  37,  etc. 

2  "Rights  of  Foreign  Shareholders  of  European  Corporations,"  U.  S.  Depart- 
ment of  Commerce,  Bureau   of  Foreign  and  Domestic  Commerce  Trade  In- 
formation Bulletin  No.  659,  1929,  pp.  3,  5,  12. 

3  "The  Promotion  of  Tourist  Travel  by  Foreign  Countries,"  U.  S.  Depart- 
ment of  Commerce,  Bureau  of  Foreign  and  Domestic  Commerce,  Trade  Pro- 
motion Series  No.  113,  1931,  pp.  1-3. 

4  See   "The    Balance   of    International   Payments   in   the   United   States   in 
1928,"   U.   S.    Department    of   Commerce,   Bureau    of   Foreign  and   Domestic 
Commerce,  Trade  Information  Bulletin  No.  625,  1929,  pp.  19-20. 

5  Illiteracy  among  native  whites  in  America,  as  a  whole,  was,  according  to 
the  1930  census,  only  1.5  per  cent;  it  was  more  than  eight  times  higher  among 
foreign-born   whites,  and  fifteen  times  higher  among  negroes.  In   France,  in 
1930,  about  8.04  per  cent  of  French  men  conscripted  in  its  army  were  illiterates. 
France's  public   school   system   was   an   affair   of   class   distinctions.   To   poor 
children  primary  instruction  only  was  given,  up  to  the  age  of  13.  The  system 
precluded  any  higher  education  except  to  children   whose  parents  were  able 
to  pay  for  the  privilege.  Recreational  facilities  were  not  provided  for  school 
children  in  France. 

As  far  back  as  1878  a  French  Educational  Commission  on  Public  Instruction 
in  the  United  States  had  enthusiastically  reported  on  the  free  nature  and  high 
value  of  public  high  schools  in  America.  Think,  it  commented  in  part  on 
American  high  schools,  of  poor  boys  and  girls  "cultivating  their  minds  by 
studies  that  everywhere  else  are  reserved  for  the  well-to-do,  and  tell  us  if  these 
institutions  do  not  bear  the  very  seal  and  impress  of  American  civilization." 

6  See  Fay's  signed  article  in  "The  New  York  Times  Magazine,"  February 
28,  1932. 


NOTES  395 

7  See  "The  Monthly  Labor  Review,"  United  States  Department  of  Labor, 
Bureau  of  Labor  Statistics,  June,   1929,  pp.  1-10,  and  March,  1930,  p.  137, 
for  data  on  the  extent  of  this  movement. 

8  "International    Labor   Office"    (League   of   Nations),    Geneva,    1929,   Vol. 
XXXII,  No.  4,  p.  154. 

»  "Bulletin  de  1'Office  du  Travail,"  1901,  p.  856. 

1°  "International  Labor  Office,"  Geneva,  1929,  Vol.  XXXII,  No.  4,  pp.  166-167. 

11  See  "The  American  Illusion,"  pp.  12,  16,  21,  25,  55,  58,  60,  etc.  (The  Cen- 
tury Co.) 

12  Computations  of  the  amount  were  loosely  stated.  The  U.  S.  Senate  Com- 
mittee on  Banking  and  Currency  estimated  $25,000,000  in  ten  years;  Senator 
Fletcher,  the  committee's  chairman,  in  a  speech  in  the  Senate,  said  $50,000,000. 
See  "The  Congressional  Record,"  Seventy-third  Congress,  First  Session,  Vol.  77, 
Part  4,  p.  3801. 

(DuhamePs  "America  the  Menace,"  referred  to  in  this  chapter,  was  published 
by  Houghton,  Mifflin  Co.) 

CHAPTER  XXIII 
REVAMPING  THE  OLD  THEME 

1  "The  Political  Science  Quarterly,"  March,  1929. 

2  See  "The  New  York  Times  Magazine,"  December  11,  1927.  This  article 
was  advertised  hi  a  foreword  as  that  of  "the  widely  read  author  of  philosophic 
works." 

3  For  more  of  Keyserling's  opinions  see  "America  Set  Free."  Also  "Harpers 
Magazine,"  August,  1929,  and  "The  Atlantic  Monthly,"  September,  1929. 

*  "The  New  York  Times,"  July  12,  1929. 

5  "Hearings  before  the  Special   (United  States  Senate)    Committee  Investi- 
gating the  Munitions  Industry,"  1934,  p.  1169. 

6  Ibid.,  pp.  739-749,  1674-1683,  1965,  2515-2518,  2550-2557. 

7  Ibid.,  p.  193. 

8  "Great  Britain  Parliament,  Sessional  Papers,"  Vol.  XIII,  1931,  "Report  of 
the  Committee  on  Finance  and  Industry,"  p.  256. 

9  W.  T.  Stead,  "Why  the  Lords  Must  Go,"  London,  1909,  pp.  13-14.  (Stead 
Publishing  House,  London.) 

10  The  point  of  this  endorsement  of  an  "ideal  member"  of  the  House  of 
Commons  is  more  fully  seen  when  we  turn  to  the  attempts  of  some  American 
intellectuals  to   disparage  the  American   Congress  as  of  all  legislative  bodies 
the  most  unfit  and  misfit.  "Dull  as  a  Congressman"  was  one  of  Mencken's 
favorite  sayings.  Of  the  House  of  Lords  membership,  seldom  did  more  than 
200  vote  on  bills  at  any  specific  time.  Scores  of  Lords  were  in  attendance  but 
once  or  twice  a  session. 

11  See  "Parliamentary  Debates,"  1917,  N.S.  Vol.  26,  pp.  835-885,  for  the  full 
record  of  these  highly  interesting  disclosures. 

12 Mallet's  "Lloyd  George,  A  Study"  (London),  1930,  pp.  248,  251,  252, 
254,  286,  etc.  (Ernest  Benn,  London,  and  E.  P.  Dutton  &  Co.,  New  York.) 

18  "Presidential  Campaign  Expenditures,"  United  States  Senate  Report  No. 
823,  Sixty-sixth  Congress,  Third  Session  (February  24,  1921),  pp.  3,  12. 

14  United  States  Senate  Report,  No.  1480,  Seventieth  Congress,  Second  Session, 
1929,  pp.  2,  14,  27,  31,  etc.  Also  Report  No.  2024,  1929,  pp.  5-6. 

15  See   "Senatorial   Campaign   Expenditures,"  United   States   Senate   Report 


396  NOTES 

No.  1197,  Part  2,  1926,  followed  by  the  confirmatory  Report  No.  1858,  1929, 
p.  92.  A  method  was  found  of  evading  the  Pennsylvania  Corrupt  Practices  Act. 
Under  that  law  the  payment  of  poll  watchers  was  a  recognized  and  legitimate 
item  of  expense.  The  organizations  of  the  two  chief  competitors  paid  tens  of 
thousands  of  persons  designated  as  watchers  $5  to  $10  each — which  was  equiva- 
lent to  ensuring  their  votes  as  well  as  their  services.  Report  No.  1197,  p.  30. 

16  United  States  Senate  Report  No.  1197,  1926,  p.  6. 

"  "Parliamentary  Debates,"  N.S.  Vol.  51-52,  1922,  pp.  135-136.  Carson  had 
been  created  a  peer  in  1900.  From  that  date  to  1906  he  was  Solicitor-General; 
he  was  Attorney-General  in  1915;  and  First  Lord  of  the  Admiralty  in  1917. 

™lbid.,  N.S.  Vol.  49-50,  1922,  pp.  1127-1130. 

19  Ibid.,  N.S.  Vol.  49-50,  pp.  1138-1139. 

20  Ibid.,  N.S.  Vol.  51-52,  pp.  128-129. 

21  "Great  Britain  Parliament,  Sessional  Papers,"  1923,  Vol.  XI,  "Report  of 
the  Royal  Commission  on  Honors,"  pp.  7-11. 

22  "Parliamentary  Debates,"  N.S.  Vol.  210,  1927,  pp.  356,  786. 

23  "Lloyd  George,  A  Study,"  pp.   286-288. 

(Owens'  "The  American  Illusion,"  to  which  reference  was  made  in  this 
chapter,  was  published  by  Ernest  Benn,  London.  Joad's  "The  Babbitt  Warren" 
was  brought  out  by  Harper  &  Bros.) 

CHAPTER  XXIV 
THE  TRUE  CONTRAST 

1  "Stock  Exchange  Practices,"  Hearing  Before  the  Committee  on  Banking 
and  Currency,  Seventy-third  Congress,  First  Session,  Part  1,  p.  23. 

2  "Stock   Exchange   Practices,"   Report  of   the   United   States   Senate   Com- 
mittee on  Banking  and  Currency  (submitted  by  Senator  Fletcher,  June  6,  1934), 
p.  186. 

8  See  Committee's  Report,  "Review  of  Evidence,"  1913,  p.  136. 
*  "Stock  Exchange  Practices,"  etc.,  Report,  p.  101. 
6  Ibid.,  p.  148. 

6  Ibid.,  p.  85,  148-150. 

7  Ibid.,  p.  189. 
*Ibid.,  p.  172. 

» "Great  Britain  Parliament,  Sessional  Papers,"  Vol.  XIII,  1931,  "Report 
of  the  Committee  on  Finance  and  Industry." 


INDEX 


Abercorn,  Duke  of,  252,  308. 

Aborigines'  Protection  Society,  107,  259. 

Addington,  Henry,  109. 

Addison,  Dr.  Christopher,  290-291. 

Adulteration  of  foods  and  liquors,  11- 
14,  216. 

Africa,  27,  39,  258-263,  317. 

African  Society  of  London,  130. 

Aislabie,  John,  63. 

Albermarle,  Duke  of,  34. 

Albermarle,  Lord,  247. 

Alison,  Archibald,  150. 

Allegheny  Mountains,  42. 

Allen,  Colonel  Samuel,  33. 

America,  3,  30-31,  93,  94,  96,  115,  119, 
122,  126,  132,  156,  165,  175,  177-178, 
216,  218,  220,  223,  237,  241,  268, 
291,  302-303,  316,  337,  358. 

American  Brown  Boveri  Electric  Cor- 
poration, 286. 

American  colonies,  40-41. 

American  Fur  Company,  106. 

American  Marconi  Company,  255-256. 

American  Museum  or  Universal  Maga- 
zine, 83. 

American  Revolution,  68-70,  77,  84, 
100,  119,  124,  146,  156. 

American  Smelting  &  Refining  Com- 
pany, 267. 

Americans,  strictures  by  foreign  critics 
on,  82-83,  87-88,  89,  92,  93-94,  109, 
118,  122,  123,  131,  133,  147,  154,  156- 
159,  189-191,  207-209,  220-221,  229, 
237-238,  240-242,  258,  271,  297-300, 
316,  323-328,  330-331,  335-336,  339- 
341,  343,  346,  349-350. 

American  Sugar  &  Refining  Company, 
267. 

Amsterdam,  45,  84,  306,  361. 

Anstruther,  Sir  William,  281. 

Antrobus,  Sir  Edmund,  17S. 

Argentina,  341-342. 

Arlington,  Lord,  34. 


Armor  plate,  280,  282-284. 
Armstrong,  George  William,  283. 
Armstrong,    Whitworth    &   Company, 

283-284,  289. 
Army,  British,  frauds  and  corruption 

in,  71-74. 

Arnold,  Matthew,  207-210. 
Art,  counterfeiting  of  in  France,  334- 

335. 

Art,  state  of  in  England,  138-143. 
Ashanti,  262. 
Ashburton,  Lord,  246. 
Ashe,  Thomas,  94-96. 
Ashley,  Lord,  147. 
Asquith,  H.  H.,  254-256. 
Asquith,  Margot,  298. 
Astor,  John  Jacob,  106,  172,  201. 
Australia,  102-104,  245. 
Ayen,  Due  d',  314. 


Baker,  George  F.,  274. 

Baldwin,  Stanley,  287. 

Bank  Generate,  51-52,  60. 

Bank  of  England,  7,  50,  59,  64,  158, 

167,  368. 

Bank  of  Montreal,  179. 
Banks,  American,  274,  363-365. 
Banks,  British,  193-194,  213,  244,  274, 

360,  366-368. 
Banks,  French,  336. 
Barker,  Sir  John,  273. 
Barrington,  Lord,  75. 
Bass,  Ratcliffe  &  Gretton,  Limited,  321. 
Basutoland,  234. 
Bathurst,  Earl,  104. 
Bayard,  Nicholas,  33. 
Bechuanaland,  234. 
Beecham,  Sir  Joseph,  320. 
Beekman,  Henry,  33. 
Beit,  Alfred,  252. 
Belgium,   178,   258-263,  282,  311-312, 

314,  337. 


397 


398 


INDEX 


Bellomont,  Lord,  33-34,  40. 

Benbow,  John,  165. 

Bennett,  Arnold,  242. 

Berkeley,  Lord,  33-34,  40. 

Berlin,  154,  361. 

Bermuda,  39. 

Bethlehem  Steel  Company,  276,  286. 

Bigge,  John  Thomas,  104. 

Bigotry,  42,  146-147. 

Birch,  Sir  Ernest,  321. 

Birkenhead,  Earl  of,  298. 

Birmingham,  253. 

Birmingham  Small  Arms  Company, 
288-289. 

Birmingham  Trust,  Limited,  253. 

"Blackwood's  Magazine,"  194. 

Bleecker,  Henry,  43. 

Blouet,  Paul  (Max  O'Rell),  229. 

Board  of  Trade,  33-34,  39-43,  45-46, 
195,  214-215. 

Boer  Government,  235. 

Boer  War,  233-234,  252. 

Bolivia,  342. 

Borneo,  268. 

Boston,  190. 

Boston  Journeymen  Bootmakers'  So- 
ciety, 119. 

Bottle  Manufacturers'  Cartel,  304. 

Bourget,  Paul,  238. 

Bourse,  Berlin,  288. 

Bowley,  Professor  A.  L.,  268. 

Bradbury,  John,  95-96,  118. 

Brassey,  Lord,  184. 

Brazil,  342. 

Bribery,  19,  33-34,  49,  67,  85,  111-112, 
145-146,  199,  202-203,  226,  282,  285, 
341-342. 

Bristed,  John,  118-121. 

British  American  Land  Company,  104. 

British  Celanese,  Limited,  312-313. 

British  Cellulose  &  Chemical  Company, 
312. 

British  Central  Africa,  234. 

British  Controlled  Oilfields,  320. 

British  High  Court,  266. 

British  India  Steam  Navigation  Com- 
pany, 322. 

British  Museum,  139-141. 

"British  Review  or  London  Critical 
Journal,"  122,  132. 

British  South  Africa  Company,  252- 
253. 


British  Westinghouse  Company,  289. 

Brougham,  Lord,  131. 

Brown,  George,  182. 

Brussels,  258,  312,  361. 

Bryce,  James,  223-224,  227,  238-239, 

348. 

Buchan,  John,  302. 
Buckle,  Henry  Thomas,  277. 
Buckmaster,  Lord,  320. 
Buenos  Aires,  341-342. 
Bull,  Sir  William,  283. 
Burmah  Oil  Company,  Limited,  321. 
Burnett,  William,  43. 
Bute,  Marquis  of,  117. 
Buxton,  Earl,  352. 


Caen,  William  De,  26. 
Cameron,  Malcolm,  180,  183. 
Campbell-Bannerman,  Sir  Henry,  254. 
Canada,  25-30,  52,  102,  104-109,  132, 

133,  165,  177-185,  317-322. 
Canada  Company,  104. 
Canada,  New  Brunswick  &  Nova  Scotia 

Railway  Company,  179. 
Canadian  Pacific  Railway,  185. 
Candles,  frauds  in  making,  13. 
Canterbury,  Archbishop  of,  127. 
Cardiff,  117. 
Cargill,  Sir  John  T.,  321. 
Carlton  Club,  248. 
Carnegie  Steel  Company,  280. 
Carson,  Lord,  351. 
Cartels,  304. 
Cartier,  George  E.,  183. 
Casement,  Sir  Roger,  260,  264. 
Castelfield     (Klang)     Rubber    Estate 

Company,  Limited,  321. 
Castlereagh,  Lord,  130. 
Cathcart,  Lord  William,  72. 
Cavan,  Countess  Lydia,  175. 
Celebes,  268. 

Central  America,  320;  graft  in,  342. 
Cervera,  Admiral,  280. 
Chamberlain,  Arthur,  253. 
Chamberlain  family,  253. 
Chamberlain,  Joseph,  253-254. 
Chambers  of  Commerce,  France,  333. 
Champlain's  Company,  26. 
Chandos,  Duke  of,  62. 
Charles  II,  7,  32,  34-35. 


INDEX 


399 


Chartered  Bank  of  India,  Australia  & 
China,  273-274. 

Chase  National  Bank,  364. 

Chevalier,  Michael,  155-156. 

Chevenix,  Richard,  17. 

Chicago,  190,  205,  221. 

Chichester,  Lord  Edward,  165. 

China,  113,  162-164,  325. 

Chinese  labor,  235. 

Church  of  England,  127,  128. 

Cincinnati,  138,  205. 

Citroen,  Andre,  311. 

Civil  War,  189,  194-195,  199-200,  204, 
280,  299. 

Clarke,  Sir  Philip  Jennings,  69. 

Clocks,  frauds  in  making,  8. 

Clothmakers,  frauds  by,  17-21. 

Coburg  &  Peterboro  Railway  Company, 
185. 

Cochrane,  Lord,  112. 

Cockburn,  Chief  Justice,  308. 

Cockfighting  hi  Britain,  89. 

Coffee,  frauds  in  selling,  13. 

Golden,  Cadwallader,  34,  43. 

College  de  France,  331. 

Colombo  Commercial  Company,  253. 

Combinations,  Austrian,  245;  British 
industrial,  243-244,  316-317;  Ger- 
man, 244,  304. 

"Commercio,"  Lima  (Peru),  339. 

Companies,  British,  318. 

Company  of  De  Caen,  26. 

Company  of  New  France,  26. 

Company  of  the  West  Indies,  26,  27. 

Confederacy,  192. 

Congo  Independent  State,  258-261,  312. 

Congo  Reform  Association,  261. 

Congress,  American,  91,  159,  202,  243, 
274,  350-351,  361. 

Connecticut,  131,  268. 

Consolidated  Malay  Rubber  Estates, 
Limited,  266. 

Continental  Congress,  125. 

Convention  for  International  Trade  in 
Arms,  289. 

Cooke,  George,  74. 

Cooper,  James  Fenimore,  144. 

Cornbury,  Lord,  68. 

Cornwallis,  Lord,  70-72. 

Corporation  directors  in  British  Parlia- 
ment, 225-226,  254-255,  256,  317. 

Corruption,  19,  33,  34,  49,  63,  67,  71- 


77,  111-112,  153,  176,  185,  202-204, 
209-210,  216,  223-224,  227-228,  249, 
285,  314-315,  337,  341-342. 

Costa-Rica,  320. 

Council  for  Foreign  Plantations,  32-33. 

Council  for  Foreign  Trade,  36. 

Council  of  American  Shipbuilders,  286. 

Council  of  Foreign  Relations,  298. 

Council  of  Trade,  32. 

Craggs,  James,  58,  64. 

Craven,  Earl  of,  34. 

Craven,  Sir  Charles,  342. 

Crime  (in  Britain),  102-103,  134,  158. 

Croker,  John  William,  141. 

Crosbie,  William,  72. 

Cruelty  to  animals  in  Britain,  88-89. 

Cuba,  267. 

Curzon,  Earl,  349. 

Curzon,  Viscount,  165. 

Cutlers'  Company,  219. 


Dacre,  Lord,  32. 

"Daily  Chronicle  Investment  Corpora- 
tion," 356. 

"Daily  Chronicle,"  London,  284. 

"Daily  Mail,"  London,  299,  355. 

"Daily  News,"  London,  210-211. 

Dartmouth,  Earl  of,  347. 

Dawson,  William  Harbutt,  272. 

Dawson,  William  McD.,  35. 

DeBeers  Mining  Company,  230-231. 

Decorations,  sale  of  in  France,  227. 

Defoe,  Daniel,  54,  66. 

De  La  Warr,  Lord,  247. 

Denbeigh  and  Esmond,  Earl  of,  165. 

Denman,  Baron,  354. 

Dennie,  Joseph,  89-91,  101,  302. 

DePuyster,  John,  43. 

Derby,  Earl  of,  117. 

Detroit  and  Milwaukee  Railway,  184. 

Deutche  Waffen-und-Munitionsfab- 
riken,  282. 

Devonshire,  Duke  of,  117,  354. 

Diamond  mines,  South  African,  230- 
232. 

Dickens,  Charles,  158-162,  242,  298. 

Dillon,  Read  &  Company,  363. 

"Directory  of  Directors,"  English,  224. 

Disraeli,  Benjamin,  202,  204,  212,  214. 

Doheny,  Edward  L.,  358-359. 


400 


INDEX 


Drunkenness  in  America,  91 ;  in  Britain, 

89,  97,  149-150. 
"Dublin  Evening  Mail,"  ISO. 
Duchesenau,  Jacques,  28. 
Dufferin,  Lord,  309. 
Duhamel,  Georges,  330-332. 
Duncan,  John  M.,  131. 
Duncannon,  Viscount,  165. 
Dunedin,  Baron,  354. 
Dunmore,  Lord,  84. 
DuPont,  Lammot,  342. 
DuPont  de  Nemours  Company,  I.  E., 

277. 

Durham,  Bishop  of,  301. 
Dutch  East  Indies,  268. 


India  Company,  49-50,  59,  64,  65, 
113,  164. 

Eastern  County  Railway,  176. 
"Economic  Journal,"  325. 
"Economist,"    London,    161-162,    167, 

168,  174,  176,  203,  211,  226,  235,  239, 
245,  247,  250-251,  254,  263,  264,  273, 
279,  309,  319,  327. 

"Edinburgh  News,"  324. 

"Edinburgh  Review,"  118, 129-131, 139, 

169,  192-193. 
Education  (see  Schools) . 
Education  Convention,  132. 
Edward  I,  5. 

Egerton,  Lord  Francis,  165. 

Egypt,  213. 

Ekman,  Carl  Gustav,  311. 

Elections,  American,  bribery  and  fraud 

in,  249-251;  British,  67-68,  83,  111- 

112,  145-146,  200,  202,  250. 
Electric  Boat  Company,  253-254. 
Electric  Bulb  Cartel,  304. 
Elizabeth,  Queen,  laws  against  trade 

frauds,  7,  12,  13,  16,  119. 
Ellice,  Edward,  106,  108. 
Elliott,  Sir  Gilbert,  75. 
Elliott's  Metal  Company,  253-254. 
Ellis,  Agar,  141. 
Ellis,  Welbore,  75. 
England,  4,  5,  8-11,  13,  16-17,  20,  25, 

32,  40,  45,  51,  54,  60,  66-67,  102,  114, 

116,  120-121,  131,  133,  138,  141,  156, 

193-194,  199,  205,  210,  220,  264,  276, 

279,283,308,319,337,360. 
English  Copper  Company,  57. 


English  Marconi  Company,  235. 

Erskine,  Sir  William,  72. 

Essen,  282. 

Evans,  Captain  John  R.  N.,  33,  34. 

Exchange  Alley,  46,  66. 

Exeter,  Bishop  of,  148. 

Exports,  American,  117,  137,  165,  191; 

British,  114-115,  117,  137,  165,  174, 

273;  South  American,  263. 


Factory  conditions,  American,  119, 137, 
191,  230;  British,  110,  114-115,  119, 
131,  137,  148,  150;  French,  333-334; 
Japanese,  269. 

Falkland,  Lord  Anthony,  75. 

Fall,  Albert  B.,  358-359. 

Fay,  Professor  Bernard,  331. 

Fearon,  Henry  Bradshaw,  121-122. 

Federal  Trade  Commission,  360. 

Ferrero,  Guglielmo,  4. 

Fife,  Duke  of,  252. 

"Financial  News,"  London,  367. 

Finlay,  Sir  Robert,  308. 

Fishing  industry,  25-26. 

Fletcher,  Benjamin,  33. 

Flood,  Henry,  66-67. 

Florence,  139. 

Folkestone,  Viscount,  175. 

Forbes,  Mrs.  Rosita,  343. 

Ford,  Henry,  311. 

Forrester,  Lord,  165. 

Forster,  W.  E.,  205-206. 

France,  53,  56,  84-86,  90,  102,  109,  120- 
121,  144-147,  159,  175-176,  218,  236- 
237,  305,  311,  313-316,  326,  328-329, 
333-335. 

Franco-Prussian  War,  218. 

Frauds  in  making  gold  and  silverware, 
5-8;  clocks  and  watches,  8,  116-117; 
pewter  and  brass,  9 ;  adulteration  of 
foods,  12-13;  oil,  honey,  wax,  to- 
bacco, coffee  and  tea,  13-14;  imple- 
ments of  war,  15-16;  woolen  goods, 
17-20,  116;  lace,  stockings,  cutlery, 
etc.,  116-117. 

Frauds,  trade-mark,  218-219. 

Free  School  Society,  126. 

French  Academy,  330. 

French  Academy  of  Moral  and  Political 
Sciences,  297. 

French  and  Indian  War,  43. 


INDEX 


401 


French  East  India  Company,  27,  52. 

French  General  Confederation  of  La- 
bor, 333-334. 

French  Revolution,  66,  86,  90. 

Fur  Trading,  25-27;  frauds  and  other 
evils  of,  27-29,  37-38,  41-44,  108. 


German  Southwest  Africa,  260. 

Germany,  39,  155,  218;  merchant  ma- 
rine, 272-273;  industrial  production, 
271 ;  industrialism,  272 ;  276, 280, 305, 
326,  328,  337. 

Gibbs,  Sir  Philip,  298. 

Gifford,  Lord,  252. 

Gillett,  Frederick  H.,  301. 

Girard,  Stephen,  171. 

Glasgow,  150. 

Glue  Syndicate,  304. 

Gold  Coast,  262. 

Goldsmiths,  frauds  by,  5-8;  as  bank- 
ers, 6-7. 

Goodlake,  Francis,  211-212. 

Gould,  Jay,  212,  222. 

Grand  Trunk  Railway  Company,  179, 
182-183. 

Great  Britain,  7,  13,  21,  39,  49,  55,  66, 
67,  77,  88,  102-104,  109-111,  124, 
131,  143-144,  156,  164,  172,  175,  193- 
194,  199,  216,  218,  231,  233,  267,  273, 
284,  291,  317,  326-328,  344,  358. 

Great  Southern  Railway  Company,  179, 
184. 

Great  Western  Railway  Company,  179, 
184. 

Greece,  139. 

Greenway,  Lord,  355. 

Grenfell,  E.  C.,  361. 

"Grenzboten,"  282. 

Grevy,  Francois  P.  J.,  227. 

Grey,  Earl,  121. 

Gubbins,  J.  Russell,  265. 

Guilds,  frauds  by  (see  Handicraft 
frauds) . 

Gulf  of  Guinea,  262. 

Gurowski,  Adam  G.  De,  185, 

Gzowski  &  Company,  183. 


Hales,  Winking,  211-212. 

Hall,  Captain  Basil,  133-134,  139. 

HaU,  Sir  James,  133. 


Hallmarks,  fraudulent,  7. 

Hamilton,  Alexander,  83,  110-111,  153. 

Hanau,  Marthe,  314-315. 

Handicraft  frauds,  5-11,  15-20. 

Handicraftsmen,  10. 

Harcourt,  Sir  William  Vernon,  211. 

Harley,  Robert,  47,  54. 

Harriman,  Joseph  W.,  360. 

Harris,  Frank,  299. 

Harris,  Rev.  J.,  261. 

Harris,  Lord,  352. 

Hartford,  125. 

Harvey,  D.  W.,  ISO. 

Hatry,  Clarence,  360-361. 

Haussman,  Conrad,  279. 

Haussmann,  Baron,  224. 

Haverhill  (Mass.),  115. 

Hawkesbury,  Lord,  109. 

Heeringen,  General  von,  282. 

Henderson,  Arthur,  354-355. 

Henry  VIII,  laws  against  trade  frauds, 

5,  18. 

Herbert,  Sydney,  163. 
Hibbert,  J.  T.,  206. 
Hill,  Sir  Richard,  88. 
Hincks,  Sir  Francis,  178, 182-183. 
Hobart,  Lord,   106. 
Hobson,  R.  O.,  367. 
Hogge,  J.  M.,  251. 
Holding  companies,  British,  317. 
Holland  Company,  84-85. 
Holland,  Lord  Henry,  74. 
Holland,  7,  39,  45,  109,  127-128,  147; 

Dutch  East  Indies  trade,  268;  wealth 

of,  269;  276,314,317. 
Holton,  L.  H.,  183. 
Honduras,  210,  213. 
Hooley,  Ernest  Terah,  245-248. 
House  of  Commons,  63-64,  67,  70,  109, 

111-112,  120,  126,  130-131,  146,  151, 

160,  162-163,  172,  204,  210-212,  225- 

226,  250,  252,  255-256,  264,  287,  289, 

308,  347,  357. 
House  of  Lords,  63,  127,  134,  147-148, 

160,  172,  203,  206,  225,  243,  346,  349. 
Houstoun,  Dr.  James,  55-56,  61-62. 
Howe,  Lord,  75. 
Hudson  Bay  Company,  34-38,  41,  106- 

108,  175,  322. 
Humbert,  Gustave,  236. 
Humbert,  Madame,  236-237. 
Hume,  Joseph,  142,  151. 


402 


INDEX 


Hyde,  Lord,  32. 

Illinois,  132. 

Illinois  Company,  84. 

Illiteracy,  British,  128,  173,  205-206. 

Immigration,  America,  111,  186,  190; 
Canada,  105. 

Imperial  Airways,  326. 

India,  113,  164,  174-175. 

Indiana,  132. 

Indians,  atrocities  on  in  South  Amer- 
ica, 264-265. 

Industrial  output,  American,  273;  Brit- 
ish, 273;  French,  272;  German,  273. 

Inge,  William  Ralph,  300. 

Inland  Revenue  Commission,  292. 

International  Match  Corporation,  309- 
310. 

International  Steel  Entente,  304. 

International  Telephone  and  Telegraph 
Company,  309. 

Interstate  Commerce  Commission,  274. 

Investments,  American  foreign,  323- 
326;  British,  166,  267-268,  273,  313, 
317-318,  325. 

Ireland,  104-105,  134,  344. 

Iron,  frauds  in  manufacture,  11. 

Irving,  Washington,  144. 

Isaacs,  Godfrey,  255. 

Isaacs,  Sir  Rufus,  255-256. 

Italy,  218,  282-283,  310,  316,  325. 

Jamaica,  39. 

James  I,  law  against  trade  fraud,  20. 

James,  Henry,  240-243,  245. 

James,  William,  241. 

Janson,  Charles  William,  93-94,  96,  100. 

Japan,    245;    industrial    development, 

269-270;   speculation,   270;   political 

corruption,  271;  285,  304. 
Japanese-Chinese  War,  270. 
Java,  268. 

Jefferson,  Thomas,  83,  173. 
Jenkinson,  Bishop  John  Banks,  175. 
Joad,  C.  E.  M.,  344. 
Joel,  S.  B.,  352. 
"Journal  des  Debats,"  314. 

Kaffirs,  164. 

Kamunting  Tin  Dredging  [Company], 
Limited,  321. 


Kaye,  Sir  John  Lister,  266. 

Keefer,  Thomas  C.,  181,  183. 

Kent,  Chancellor,  115. 

Kentucky,  132. 

Keyserling,  Count  Hermann,  339-343. 

Kimberley  diamond  mines,  230. 

Kindersley,  Sir  Robert,  325. 

Kipling,  Rudyard,  221. 

Klein,  Dr.  Julius,  325. 

"Knickerbocker  Magazine,"  143. 

Knight,  Charles,  193. 

Knight,  Robert,  62-64. 

Knoch's,  254,  288. 

Kreuger,  Ivar,  305-311. 

Kreuger  &  Toll,  305-309. 

Krupp's,  281-282. 

Kylsant,  Lord,  307-309,  358,  360. 


Labor,  woman  and  child,  111,  114,  137. 

Lancashire,  114-115,  117. 

"Lancet,"  London,  216. 

Land  grants,  huge,  America,  34,  83-86, 

104-175;  Canada,  181;  South  Africa, 

252-253. 

Land  jobbery,  34,  67. 
Land  speculation  and  jobbery,  83-86, 

104. 

Landsdowne,  Lord,  259. 
"La  Nouvelle  Revue  Francois,"  332. 
Lansbury,  George,  255. 
Latin-America,  325;  graft  in,  341-342. 
Laval,  Bishop,  28-29. 
Law,  George,  51-54,  60-61. 
Lawson,  W.  R.,  274. 
League  of  Nations,  289. 
Leather,  frauds  in,  11. 
Lee,  Higginson  &  Company,  306. 
Lee,  Ivy  L.,  286. 
Leeds,  149,  205. 
Lehman,  Lucien,  335-336. 
Lehman-Russbiildt,  Otto,  290. 
Leigh,  Lord,  165. 
Leopold  II,  258. 
Lenox,  Lord  Sussex,  165. 
Lever  Brothers,  317. 
Leverhulme,  Lord,  317. 
Leveson,  Viscount,  165. 
Levison,  Andre,  302. 
Lewis,  Charles,  211. 
Lewis,  Sinclair,  302,  305,  331-332. 
Liberty  Bonds,  291. 


INDEX 


403 


Liebknecht,  Karl,  279-282. 

Lilford,  Lord,  16S. 

Linati,  Carl,  303. 

Lincoln,  Abraham,  202. 

Lincoln,  Earl  of,  32,  73. 

Littleton,  Oswald,  175. 

Liverpool,  117,  205. 

Lloyd   George,  David,  253,  255,  257, 

291,  349,  354,  356-357. 
Lloyd,  William  Freeman,  128. 
Locker-Lampson,  O.,  251. 
London,  8,  46,  89,  102,  194,  195-197, 

204-205,  230,  234,  246,  264,  312,  361. 
London  Bank  of  Mexico,  265. 
London  &  Birmingham  Railway,  147- 

148. 

London  Corporation,  216. 
London   &   Gore   Railway   Company, 

179. 

London  &  Port  Sarnia  Railway  Com- 
pany, 179. 
London  Stock  Exchange,  137,  213,  232- 

233,  263,  288,  320,  367. 
"London   Times,"   210-212,   232,   248, 

298. 

London  United  Tramways,  250. 
Long  Island,  33. 
Lords  of  Trade,  33. 
Loreburn,  Earl,  347. 
Lorimer,  William,  351. 
Louis  XIV,  26,  27;  XV,  65;  XVI,  90. 
Louisiana,  52,  95,  121. 
Lowell  (Mass.),  115. 
Lowenstein,  Alfred  Captain,  312-313. 
Luttrell,  Temple,  68-69. 
Lynn  (Mass.),  115. 


Macaulay,  Lord,  124,  172-173. 
Macclesfield,  Earl  of,  165. 
Mackenzie,  Sir  Alexander,  106. 
Macmillan,  Lord,  368. 
MacNab,  Allan  N.,  178-180. 
Mac  Neill,  Swift,  254,  308. 
Macpherson,  D.  L.,  184. 
McDonough,  John,  171-172. 
McGill,  Peter,  179-183. 
M'Gillivray,  William,  107-108. 
Madura,  268. 
Maeterlinck,  Maurice,  258. 
Mallet,  Sir  Charles,  349,  356. 


Malt,  frauds  in  making,  12. 
Manchester,  137,  149,  163,  205. 
Manchester,  Earl  of,  32. 
Manufactures,  American,  110-111,  115; 

English,  4-21,  41,  110-111,  114-115, 

164. 

Marlborough,  Earl  of,  32. 
Marriott,  Sir  William,  248. 
Marryatt,  Captain  Frederick,  138,  156- 

158,  161-162. 
Martineau,  Harriet,  155. 
Maryland,  81. 
"Marz,"  279. 

Massachusetts,  40,  115,  132,  264,  268. 
Match  Trust,  Sweden,  304. 
Matsumoto,  Vice-Admiral,  285. 
Melish,  John,  101. 

Mencken,  Henry  L.,  302-303,  331-332. 
Merchant  marine  (See  Shipping). 
"Mercure  de  France,"  338. 
Meredith,  Sir  William,  69. 
Metropolitan  Carriage,  Wagon  &  Fi- 
nance Company,  288-289. 
Metropolitan  Opera  House,  299. 
Mexico,  267,  342. 
Michigan,  132. 

Mill,  John  Stuart  Mill,  170,  203. 
Millet,  Jean  Charles,  335. 
Millionaires,  American,  222,  272,  292, 

358,  362;  British,  222-223,  292,  359; 

German,  272,  292. 
Mills,  David,  185. 
Milner,  Viscount,  234-235. 
Milnes,  Lieutenant-Go vernor,  106-107. 
Mines,    conditions   in    South    African, 

234-235. 

Mires,  M.,  197-198. 
Mississippi  Company,  52-54,  56,  60,  65, 

85. 

"Mogul"  case,  243. 
Molesworth,  Lord,  62. 
Molucca  Islands,  268. 
Montgomery,  Sir  James,  104. 
Montreal,  105,  107,  108. 
Morand,  Paul,  332-333. 
Morgan,  J.  Pierpont,  201,  274-275. 
Morgan,  J.  P.  Jr.,  361-362,  367-368. 
Morgan  &  Company,  J.  P.,  361,  363. 
"Morning  Post,"  London,  284,  299. 
Morris,  James,  183. 
Morris,  Robert,  84,  86. 
Mundella,  A.  J.,  205. 


404 


INDEX 


Municipal  Common  Councils,  215-216, 

224,  226-227. 

Municipal  Reform  League,  216. 
Miinsterberg,  Professor  Hugo,  271. 
Murray,  Captain  A.  C.,  287. 
Murray,  Sir  George  H.,  284. 
Mussolini,  Benito,  329. 


Napoleon,  92,  156,  278. 
Napoleon  III,  176,  224,  282. 
National  Bank  of  India,  273. 
National  City  Bank,  364,  365. 
National  Gallery,  141-142. 
National  Liberal  Federation,  357. 
National  Society,  128. 
Naval  equipment,  frauds  in,  12,  15-16, 

279. 
Navy  department  (British),  frauds  in, 

75. 

Netherland  Indies,  268. 
Newbold,  J.  T.  Walton,  344. 
Newcastle,  Duke  of,  76,  378. 
New  England,  125. 
Newfoundland,  25,  27,  39. 
New  Guinea,  268. 

New  Hampshire,  Province  of,  33,  40. 
New  Haven,  125. 
New  Jersey,  81. 
Newport   News   Shipbuilding   &   Dry 

Dock  Company,  286. 
New  York  City,  68,  115,  158,  224,  328, 

335. 

"New  York  Mirror,"  146. 
New  York,  New  Haven  &  Hartford 

Railroad  Company,  274. 
New  York,  Province  of,  32. 
New  York,  State  of,  81,  84,  115,  125. 
New  York  Stock  Exchange,  288,  324, 

361. 

"New  York  Times,"  285,  299. 
"New  York  World,"  300. 
New  Zealand,  245. 
Nicholson,  Joseph,  83. 
Niger  Company,  317. 
Nigeria,  262-263. 
Nobel,  Alfred,  280. 
Nobel  Dynamite  Trust,  281. 
Nobel  Explosives  Company,  280-281. 
Nobel  Prize,  301,  305. 
Norfolk,  Duke  of,  117. 
Norman,  Sir  Henry,  255. 


North,  Lord,  74. 

"North  American  Review,"  171. 

North  West  Company,  106-108. 

Northern  Railway  Company,  184. 

Northumberland,  Duke  of,  353. 

Norway,  218. 

Nottingham,  115,  142,  203,  245. 

Nova  Scotia,  39,  105. 

Nye,  Senator  Gerald  P.,  277. 


O'Connell,  Daniel,  134. 
Ohio,  84-85,  125,  132. 
Ohio  Company,  84-85. 
Okuma,  Count  Shigenobu,  270. 
Ontario,  104-105,  177,  179. 
Opium  trade,  113,  162-163. 
Orleans,  Duke  of,  51. 
Osborne,  R.  B.,  202-203. 
"Osservatore  Romano,"  328. 
Ottley,  Sir  Charles,  284. 
Oustric  Bank  scandal,  336. 
Owen,  Collinson,  345. 


Pacific  Ocean,  48. 

Paish,  Sir  George,  325. 

Palmer,  John,  96,  118. 

Palmerston,  Lord,  163. 

Panama  Company,  227-228,  337. 

Paris,  53,  66,  115,  176,  224,  236,  243- 
244,  250-251,  287-289,  306,  309,  314, 
332,  343. 

Parker,  R.  F.,  250. 

Parkinson,  Richard,  92-93,  96,  100. 

Parliament,  British,  4,  5,  9,  12,  17,  38, 
46-47,  49-50,  62-64,  68-69,  76,  83, 
88-89,  98,  107,  111-112,  116,  128- 
129,  130-131,  139-141,  146,  148,  151, 
159,  165,  177,  195-196,  203-204,  205, 
210-211,  214-215,  224-226,  319,  355, 
361,365;  Canadian,  178-185;  French, 
227-228,  279,  293,  314-315,  324. 

Pataling  Rubber  Estates  Syndicate, 
Limited,  266-267. 

Pauperism,  in  Britain,  104,  149,  150, 
167-168,  205,  294,  317;  in  Ireland, 
134;  in  France,  115,  168. 

Pecora,  Ferdinand,  362. 

Pelley,  J.  H.,  36. 

Penn,  William,  125,  173. 

Pennsylvania,  81,  84,  125, 126, 132, 191. 


INDEX 


405 


Peonage,  265. 

"People's  Journal,"  London,  164. 
Peru,  305,  342,  364. 

Peruvian-Amazon  Company,  263-266. 
Peruvian  Corporation,  Limited,  266. 
Peto,  Brassey,  Betts  &  Jackson,  181, 

183. 

Pewter,  pewterers,  frauds,  9,  10. 
Phelps  &  Gorham  Company,  84. 
Philadelphia,  82,  109,  224. 
Pirn,  Captain  Bedford,  210. 
Plimsoll,  Samuel,  213-215. 
Plymouth  Colony,  125. 
Poland,  305. 
Political   funds,   American,   249,   349- 

351,  353 ;  British,  349. 
Pools  (British  industrial  combinations) , 

243,  244. 

"Portfolio"  (Magazine),  98-99,  100. 
Portland,  Duke  of,  58. 
Portugal,  40. 

Pottinger,  Sir  Henry,  163. 
Press,  British  measures  against  freedom 

of,  38,  68-69,  151,  211-212. 
Prince  Edward  Island,  104. 
Prince  of  Wales,  344. 
Profits,    American    corporations,    276- 

277,  280,  293,  323;  British,  273-274, 

281,  288-289;  French,  293;  German, 

282. 

Propaganda,  286. 
Providence  (R.  I.),  110. 
Prussia,  205. 

"Pujo  Committee,"  274,  363. 
Puritans,  214;  Puritanism,  303. 
Putumayo  Region,  263-266. 


"Quarterly  Review,"  96-97,  112,  121, 

122,  124,  192. 
Quary,  Colonel  Robert,  40. 
Quebec,  City  of,  104. 
Quebec,  Montreal,  Ottawa  &  Occidental 

Railway  Company,  179,  180. 
Quebec,  Province  of,  102,  104-105. 


Railways,  American,  165 ;  British,  147- 
148,  165-166,  176-177,  195-196,  244; 
Canadian,  177-185, 193;  French,  175- 
176,  197. 

Rand  gold  mines,  233-235. 


Randot,  Intendant,  29. 

Rantoul,  Robert,  119. 

Raumer,  Frederick  von,  154. 

Read,  H.  M.,  265. 

"Review  Encyclopedique,"  144. 

Rhode  Island,  110,  125,  264. 

Rhodes,  Cecil,  230,  252. 

Rhodesia,  252. 

Ricardo,  David,  137. 

Ricardo,  John  Lewis,  165. 

Richard  III,  17. 

Richelieu,  Cardinal,  26. 

Richmond,  J.  R.,  281. 

Rigby,  Richard,  69,  76. 

"Rings"  (British  industrial  combina- 
tions), 243. 

Rio  Tinto  Mines,  267. 

Roberts,  Lord,  32. 

Robinson,  Sir  H.,  298. 

Robinson,  Sir  John,  34. 

Robinson,  Sir  Joseph  B.,  352-354. 

Robson,  Joseph,  38. 

Rochefoucauld-Liancourt,  Due  de  La, 
90-92,  96. 

Rockefeller,  John  D.,  274. 

Rockefeller,  Percy  A.,  309. 

Rockefellers,  312. 

Rome,  139. 

Roseberry,  Lord,  356. 

Ross,  George,  182. 

Rothermere,  Viscount,  326,  327,  361. 

Rothschild,  Baron,  147,  181,  222. 

Rothschilds,  267. 

Royal  African  Company,  62. 

Royal  Commission  on  Honors,  354-355. 

Royal  Exchange,  46. 

Royal  Mail  Company,  255. 

Royal  Mail  Steam  Packet  Company, 
307. 

Royal  Society,  140. 

Rupert,  Prince,  34. 

Russell,  Lord  John,  151,  179. 

Russell,  Oland  D.,  285. 

Russia,  Soviet  Government  of,  289. 

Russo-Japanese  War,  270. 

Ryan,  Thomas  F.,  274. 


St.  Lawrence  &  Atlantic  Railway,  183. 
Sala,  George  Augustus,  220. 
Salisbury,  Lord,  248-253. 
Salt,  T.,  206. 


406 


INDEX 


Samuel,  Herbert,  255. 

Sandford,  G.  M.  W.,  216. 

San  Domingo,  213,  305. 

San  Francisco,  205. 

Santiago  de  Cuba,  280. 

"Saturday  Review,"  London,  201,  212, 
233,  274. 

Savage,  Henry,  72. 

Sawasaki,  Captain,  285. 

Saxony,  205. 

Say,  Viscount,  32. 

Schiff,  Jacob  H.,  274. 

School  of  Design,  142. 

Schools,  America,  124-126,  131-132, 
173;  Britain,  126-127,  148,  205-206; 
France,  127;  Germany,  128;  Hol- 
land, 127-128. 

Schuyler,  Abraham,  43. 

Schuyler,  Peter,  33. 

Scioto  Company,  84-85. 

Scotland,  319. 

Seeley,  Colonel  J.  E.  B.,  287. 

Sefton,  Earl  of,  165. 

Selbourne,  Lord,  347-353. 

Selkirk,  Lord,  104,  107,  175. 

Shaftesbury,  Earl  of,  160,  195-196. 

Sharp,  Jacob,  226-227. 

Shaw,  George  Bernard,  298-299. 

Shaw,  Thomas,  318. 

Shearer,  William  B.,  286. 

Sheffield,  142,  219. 

Sheridan,   Richard  Brinsley,   112. 

Sherman  Anti-Trust  Act,  243. 

Shipping,  American,  173-174,  195,  272; 
British,  39-40,  164,  173-174, 195,  213- 
215,  272;  German,  195,  272. 

Shirreff,  William,  72. 

Short,  Alfred,  294. 

Shrewsbury,  Earl  of,  165. 

Siegfried,  Andre,  331. 

Sierre  Leone  Company,  98. 

Silversmiths,  frauds  by,  5-8. 

Sinclair,  Sir  George,  175. 

Sinclair,  Harry  F.,  359,  362. 

Sinclair,  Upton,  331. 

Slater,  Samuel,  110. 

Slavery,  130-131. 

Slums,  British,  149,  150,  167,  195-196. 

Smith,  Frank  L.,  351. 

Smith,  Colonel  Henry,  33. 

Smith,  Sir  William  E.,  284. 

"Social  Demokraten,"  310. 


Socialist  protests,  220,  261,  306. 

Somerset  House,  141. 

South  Africa,  230,  352 ;  land  companies, 
233;  mines,  230-233. 

South  America,  27,  48,  245,  263-267, 
320,  339-343;  graft  in,  342-343. 

South  Carolina,  125. 

Southhampton,  Earl  of,  32. 

South  Sea  Company,  47-49,  54,  61-66, 
85. 

South  Sea  House,  57. 

Spain,  40,  65,  267,  310,  312. 

Spanish-American  War,  233,  280. 

"Speaker,"  London,  233. 

Spear,  Lawrence  Y.,  342. 

"Spectator,"  London,  195,  212,  221-222, 
248. 

Speculation,  53-59,  65-66,  155,  218f 
231,  239,  263-264,  308-310,  314-316, 
338,  361,  365-366. 

"Speeding-up"  system,  America,  333; 
France,  333-334. 

Spencer,  Chief  Justice,  115. 

Spender,  J.  A.,  302-303. 

Stamp,  Sir  Josiah,  268. 

Standard  Oil  Company,  267,  320. 

Stanhope,  Earl,  127. 

Stavisky,  Serge  Alexandre,  336-337. 

Stead,  William  T.,  346-347. 

Steevens,  G.  W.,  220. 

Stephenson,  George,  181. 

Stockbrokers,  manipulations  by,  46- 
47,  57. 

Stockholm,  305-311. 

Stockjobbing,  45-46,  53,  55-58,  61,  62, 
63,  155,  180,  183,  197-199,  218,  231, 
263-264,  267,  275,  314-315,  319,  336- 
337. 

Stock  ownership,  diffusion  of  in  Brit- 
ain, 318-319. 

Stock  watering,  36-37,  218,  225-226, 
243,  244-246,  263-264,  282,  293, 
318. 

Strathroy  &  Port  Frank  Railway  Com- 
pany, 179. 

Stuart,  James,  139. 

Stuart  of  Wortley,  Lord,  348. 

Sugar  Trust,  249. 

Sumatra,  268. 

Sunday  School  Society,  128. 

Sunderland,  Earl  of,  49,  64. 

Superphosphate  Cartel,  304. 


INDEX 


407 


Supreme  Court  of  the  United  States, 

85,  359. 

Surrey,  Earl  of,  147. 
Sussex,  117. 

Sweden,  218,  304-305,  310-311. 
Swedish  Match  Company,  305-306. 
Switzerland,  205,  218,  285,  314. 
Sword-Blade  Company,  59. 
Sydenham,  Lord,  178. 


Tache,  E.  P.,  183. 

Tammany  Hall,  76,  190,  217,  348. 

Tardieu,  Andre,  329. 

Terrugoro  Fujii,  Admiral,  285. 

Thornycroft's,  288. 

Thring,  G.  H.,  299. 

Thurtle,  E.,  355. 

Thyssen,  Fritz,  304,  311. 

"Times"   London,   210-212,   232,   248, 

356. 

Tirpitz,  Admiral  von,  279. 
Titles,  granting  of,  112,  248-251,  322, 

345-349,  351,  355. 
Tobacco,  frauds  in  selling,  13. 
Tocqueville,  Alexis  de,  152-154,  223. 
Tories,  British,  89,  123,  129. 
Toronto  Board  of  Trade,  35. 
Tourist  traffic,  American,  328-329,  344. 
Townshend,  Charles,  74. 
Townshend,  Thomas,  74. 
Trade-mark  frauds,  218-219,  270. 
Transvaal,  The,  234-235,  246,  252. 
Treitschke,  Heinrich  von,  154. 
Trollope,  Anthony,  189-193,  242. 
Trollope,  Frances  Milton,  138-139,  143- 

144,  189,  197. 

Trollope,  Thomas  Anthony,  138. 
"True  Sun,"  151. 
Trusts,  American,   240,  243-245,  248; 

European,  304;  British,  316-317. 
Tubes,  Limited,  253. 
Tugwell,  Bishop,  262. 
Turkey,  283,  287. 
Tweed,  William  M.,  217. 


Unilever  "colossus,"  317. 

Union  for  the  Protection  of  Industrial 

Property,  28. 

Union  Parliament  of  South  Africa,  236. 
United  Harvey  Corporation,  282. 


United  Newspapers,  Limited,  356. 

United  States  Bureau  of  Labor  Statis- 
tics, 293. 

United  States  Senate,  286,  301,  337, 
350-351,  358 ;  Committee  Investigat- 
ing Munitions  Industry,  277,  290, 
341-342 ;  Committee  on  Banking  and 
Currency,  337, 362-365 ;  Special  Com- 
mittee Investigating  Presidential 
Campaign  Expenses,  339. 

Usury,  137. 


Vanderbilt,  Commodore  Cornelius,  201, 

212,  222. 

Vandervelde,  Emil,  261. 
Vare,  William  S.,  351. 
Venice,  144. 

Vernon,  Secretary  of  State,  34. 
Verplanck,  Gulian  C.,  98-99,  101. 
Vickers-Armstrong,  289. 
Vickers,    Limited,    284-285,    287-290, 

342. 

Victoria,  Queen,  216,  248. 
Virginia,  81,  125. 
Vyner,  Sir  Charles,  34. 


Wages,  5,  6,  8. 
Walpole,  Horace,  66. 
Walpole,  Sir  Robert,  62,  140. 
Walsh,  Robert,  Jr.,  123-124,  129, 131. 
War  equipment,  frauds  in,  15,  16,  69- 

73;   profiteering,   15-16,  69-73,  276, 

277. 

Washington,  City  of,  123,  190. 
Washington,  George,  83,  173. 
Wealth,  American,  237;  French,  237. 
Weld,  Isaac,  Jr.,  81-84,  96,  100. 
Wellington,  Duke  of,  151,  160,  278. 
Wells,  H.  G.,  241-242,  245. 
Welsh  Lead  &  Copper  Company,  57. 
Welter,  G.,  338. 
West  Indies,  39,  43,  130. 
"Westminster  Gazette,"  348. 
Westmoreland,  Lord,  104. 
Westralia,  246. 
Whaling,  125. 
Whigs,  123. 
White,  James,  319,  320. 
Wiggin,  Albert  H.,  364. 
Wilkes,  John,  140. 


408 


INDEX 


William  III,  7. 

Willinck  &  Strapporst,  84. 

Willoughby,  Lord,  32. 

Wilmot,  Sir  Eardley,  131. 

Wilson,  Bishop  Thomas,  21. 

Wilson,  Woodrow,  297. 

Wilton,  Earl  of,  165. 

Winnipeg,  107. 

Wood,  General  Leonard,  350. 

Woodstock  &  Lake  Erie  Railway  Com- 
pany, 179. 

Woolen  goods,  frauds  in  manufacture, 
17-20. 

World  War,  271,  276-279,  291,  297, 323, 
349. 

Wray,  Sir  Cecil,  69. 

Wright,  Frances,  152. 


Wright,  Whittaker,  308. 
Wynford,  Baron,  175. 


X  Y  Company,  106. 


Yamamoto,  Admiral  Count   Gombei, 

285. 

York,  Duke  of,  92. 
Yorkshire,  117. 
York    woolen    manufacturers,    frauds 

among,  19-21. 
Young,  Sir  William,  112. 


Zaharoff,  Basil,  290. 
Zenger,  John  Peter,  68.